Author: Walker Newell
It's been more than 50 years since Congress passed the Employee Retirement Income Security Act (ERISA) in 1974. Among other things, ERISA holds corporations sponsoring 401(k) and other benefit plans for their employees — and leaders who serve as plan trustees — to strict fiduciary duties. These duties include acting prudently, avoiding conflicts of interest and diversifying plan investments.
In the early decades of the new statute, high-dollar class action litigation against corporate plan sponsors was uncommon. The litigation landscape started to change in the mid-2000s, when plaintiffs' firms increasingly sued large companies alleging that employees had been charged excessive investment management fees.1
Over the past 20 years, the ERISA class action litigation industry has grown to become a significant business risk, particularly for large corporations with substantial plan assets. Many companies have reached settlements in the seven or eight figure range.2
Like most areas of litigation, the story of ERISA class action litigation is, in significant part, about following the money. Corporate benefit plans manage trillions of dollars in employee funds. With significant assets at stake, alleged issues with fund administration or investment strategies can add up to high potential monetary damages. The risk of costly damages, in turn, often leads companies to settle rather than litigate cases through trial.
Given these developments, many companies today choose to buy fiduciary liability insurance. As explained in detail below, recent trends in ERISA litigation suggest that fiduciary liability coverage is here to stay as a component of the broader management liability insurance program, along with directors and officers liability, employment practices liability and crime coverage. Let's take a look at some of these trends.
Filing rates are up
In April 2026, Bloomberg reported that Q1 ERISA class action filings had almost doubled year-over-year.3 The increase in early 2026 is consistent with broader ERISA class action filing trends in recent years, which saw defined benefit plan cases on a steady rise from 2023 to 2025.2 Unsurprisingly, larger plans with hundreds of millions or billions of dollars in assets are the prime targets.
An expanding case mix
The Q1 filing uptick is consistent with a broader trend of plaintiffs' firms seeking to establish new legal theories to drive additional ERISA litigation.
Historically, the most prevalent ERISA class action allegations have typically focused on excessive fee and/or investment selection theories — and plaintiffs' lawyers continue to file these cases. One common recent theory has been to allege that 401(k) plans improperly maintained underperforming "target date" funds for retirees despite alleged evidence of underperformance.4
In addition to a steady stream of excessive fee and investment management cases, in the last year or so, plaintiffs' firms have also staked out new ground in areas including:
- Use of forfeited employer contributions. Over the past three years, plaintiffs have filed roughly 100 class actions challenging how retirement plan sponsors use employer contributions that departing employees forfeit before those contributions vest. According to the theory in these cases, plan fiduciaries allegedly breached their fiduciary duties by applying the forfeited funds against future employer contributions when they should have instead credited the forfeited funds against administrative expenses charged to participants. While district courts have dismissed many of these cases, some are still embroiled in the federal appellate courts, with appeals pending in some key circuits.5
- Voluntary benefit plan litigation. Recently, one of the most prominent ERISA class action plaintiffs' firms filed a series of cases related to voluntary employee benefit plans (e.g., opt-in accident and critical illness benefits). While ERISA safe harbors may be available for these plans, in the relevant cases, plaintiffs have alleged that the safe harbors aren't available because employers "endorsed" the relevant voluntary benefit plans. These cases are pending in the federal courts; future decisions may further shape the ERISA risk environment.6
Dismissal rates and settlement trends
The motion-to-dismiss stage is a key battleground of federal court litigation. If a defendant succeeds at getting a case thrown out with prejudice, litigation costs are typically not severe. However, if plaintiffs defeat the motion to dismiss and a case is embroiled in document and witness discovery, litigation costs can increase very quickly. While defendants have other chances to get cases thrown out (e.g., summary judgment) or watered down (e.g., class certification), the motion-to-dismiss is a hinge point for class action litigation, and fiduciary litigation is no exception.
According to Encore Fiduciary, around 60%-65% of excessive fee lawsuits have historically survived the motion-to-dismiss stage.7 This is a strong track record for plaintiffs and helps to explain the continued frequency of ERISA class action litigation today. While the Supreme Court has weighed in on ERISA pleading standards a few times over the past decade, filing trends suggest that these decisions haven't materially diminished the risk/reward profile of fiduciary litigation for plaintiffs.
Turning to settlements, over the past five years, plaintiffs' firms have recovered more than $1 billion in excessive-fee and imprudent-investment litigation.7 With a strong chance of surviving the motion to dismiss and a track record of significant settlements, the ERISA plaintiffs' bar shows few signs of slowing down on fiduciary class litigation in the years ahead.
Fiduciary liability insurance: A key corporate risk transfer tool
With ERISA class action litigation risks showing few signs of abating, what can companies do? A well-negotiated fiduciary liability policy — placed by an expert broker with a strong carrier partner — is a great start. Companies should expect to see detailed benchmarking by plan size and employee count to support their risk transfer decisions on limits and coverage. With a careful approach to insurance, fiduciary litigation can be a nuisance rather than a potentially material balance sheet exposure.
Published October 2026
