BENEFITS DIGEST

The boards of 22 multiemployer plans, from foundry workers to food terminal employees, say the PBGC has kept them from applying for the special financial assistance Congress funded in the American Rescue Plan. Congress told the agency to process every application within 120 days; the funds say they have sat on a waitlist for more than a year without being allowed to file at all. The complaint also attacks the PBGC's position that terminated plans are ineligible, which the Second Circuit struck down in the Bakery Drivers case, now the subject of the agency's pending Supreme Court petition. The plans asked for a preliminary injunction and an expedited hearing the day they filed, and the docket has not slowed for the calendar. The court entered a scheduling order on Labor Day.

The Federal Reserve's disability plan falls outside ERISA, but that did not save the claim administrator from an ERISA-style loss last Thursday. Borrowing the deferential arbitrary-and-capricious standard from ERISA case law, the court still found the benefit termination could not stand. The administrator never obtained records from the spine specialist treating what it acknowledged was the primary disabling condition, quoted favorable excerpts while omitting the same providers' conclusions that the claimant was totally disabled, described as unremarkable the MRI films that reviewing physicians read to show herniations needing surgery, and disposed of the entire appeal in one conclusory paragraph. The claim goes back for reconsideration rather than an award, and the lesson travels beyond the Fed, since courts reach for ERISA's playbook even where ERISA does not apply.

A former employee's class action against Lithia Motors over its $1 billion 401(k) plan produced a split ruling last Wednesday. The claims that the plan paid Merrill Lynch excessive recordkeeping fees survive, both as fiduciary breaches and as prohibited transactions with a party in interest, along with a claim that Lithia failed to monitor those fees. The theory that using forfeited employer contributions to reduce future company contributions violates ERISA is gone for good. The court called it novel and unsupported by present law, refused any amendment, and dropped a footnote cataloging the near-identical complaints the same plaintiffs' firm has filed elsewhere. A challenge to the plan's switch from mutual funds to collective investment trusts also failed, for lack of any concrete injury.

Equitable cut off long-term disability benefits when the policy shifted from own-occupation to any-occupation coverage, relying on a report listing jobs the claimant could supposedly perform. Reviewing the record fresh, the court found a gap it could not overlook. The insurer's medical review said no cognitive testing had been done and never mentioned mental health treatment, even though the file documented an anxiety disorder, its treatment, and the medications. Ignoring treating-provider evidence that way denied the claimant a full and fair review, so the claim goes back to the insurer. The win was not total, though. The court read the policy's education, training or experience language to mean that any one of the three can qualify a person for a job.

A former Husch Blackwell partner claimed the firm violated ERISA by holding back money from his pay all year for the plan's year-end profit-sharing contribution and depositing it months later, past the deadline that applies to employee deferrals. Last Wednesday the court granted summary judgment for the firm and dismissed the case, with reasoning that matters to any partnership. The holdbacks fund an employer contribution, and employer contributions become plan assets only when they are deposited, so the strict deposit-timing rules for participant contributions never applied. What a pay stub calls the money does not change what the plan documents say it is, and partners drawing firm income are not employees earning wages.

Not every disability ruling last week went the claimant's way. Reviewing the record fresh, with the burden on the claimant, a California federal court granted judgment for Lincoln National even though the tinnitus, hearing loss, and depression diagnoses were undisputed. A diagnosis is not the same as functional impairment, the court reasoned, and the claimant's own treating physician agreed he could perform his sedentary job with restrictions that did not touch its duties. An earlier short-term disability approval under a separate contract did not carry over.

The stable value litigation wave picked up another survivor last Wednesday, in a ruling that teaches two lessons at once. A former Penn State Health employee had signed a severance release, and the court enforced it, dismissing his individual and class claims. But a release cannot waive claims brought on a plan's own behalf, so his derivative claims proceed. Those claims allege the fiduciaries kept an underperforming Great-West guaranteed investment contract while paying the same insurer recordkeeping fees 224% higher than average, and let forfeitures offset nearly twelve million dollars of the employer's own contributions without accounting for the conflict of interest. That loyalty theory survived where other forfeiture suits keep failing because it attacks the self-interested exercise of discretion, not the practice itself. The court also rejected an industry amicus attack on the complaint's comparator funds, holding that perfect comparators are not required at the pleading stage.

The Eleventh Circuit affirmed summary judgment for Aetna, holding the insurer did not act arbitrarily in terminating long-term disability benefits after the claimant ignored seven requests for updated tax returns and income documentation, including two more chances during the administrative appeal. The plan conditioned benefits on proof of continued loss, and a circuit-level reminder emerges that the duty to cooperate with reasonable information requests runs both ways.

Sanford Heisler Sharp McKnight filed suit in the Eastern District of Virginia claiming CGI Technologies plan fiduciaries kept the Columbia Trust Focused Large Cap Growth Fund despite trailing the Russell 1000 Growth by more than 61 percentage points from September 2020 through February 2026, with alleged losses of $168 million in a plan of more than 17,000 participants. The complaint points to over $350 million in net outflows from 2021 to 2024, and the filing joins this year's underperformance wave alongside suits against Parsons and American Express.

In Metropolitan Life Insurance Co. v. Williams, a General Motors life insurance participant tried to name a new beneficiary in a 2020 phone call to MetLife, and the court held the attempt failed because the plan required a signed written designation, with phone elections covering enrollment only. The court declined to apply substantial compliance, and under the plan's fallback provision the claimant could take only as a surviving spouse, a status the court rejected because her marriage to the participant was void under Georgia law while her prior marriage remained undissolved. The participant's daughters prevail, and the contrast with last week's Liu v. Kaiser is instructive. A requirement written into the plan gets enforced; a procedure that lives only in administrative practice does not.

The 401(k) Specialist write-up adds the retention timeline, alleging the fund stayed on the menu for nearly 12 years despite persistent underperformance and significant asset outflows, and situates the filing in Sanford Heisler's run of ERISA class actions following its UnitedHealth and General Electric settlements.

Two district courts issued ERISA venue rulings within a day of each other, and both moved the case out of the plaintiff's chosen forum. In one, a 401(k) fiduciary-breach class action filed in the Southern District of California was transferred to Nebraska under section 1404(a), where the plan is administered and its fiduciaries sit. Useful reading for anyone choosing where to file an ERISA case, or trying to move one.

Proskauer breaks down the en banc Fifth Circuit's August 11 decision rejecting the government's qualifying payment amount methodology under the No Surprises Act. The court held that ghost rates, meaning contracted rates for services a provider never actually furnishes, must be excluded from the QPA, that bonus and incentive payments must be included because the statute's reference to total amounts means the entire amount owed, and that one-off single-case agreements stay out. Payors should watch for agency guidance on how QPAs get recalculated.

This week's roundup, a short-handed edition with no case of the week, flags two decisions as most notable. In Central States v. McClain the Seventh Circuit held that Arkansas's latest pharmacy benefit manager regulation survives ERISA preemption, and in Liu v. Kaiser the Ninth Circuit extended the substantial compliance doctrine to benefit elections. The edition also collects the week's decisions on arbitration, attorneys' fees, fiduciary breach, disability claims, preemption, exhaustion, and pleading.

Since the beginning of 2025, more than two dozen putative class actions have been filed challenging the stable value funds offered in retirement plans, on complaints that follow a common template. The suits allege the selected fund credited lower returns than available alternatives and ask courts to infer a flawed fiduciary process from the performance gap. Trucker Huss recommends benchmarking against structurally comparable products, periodic market testing, and documentation of the tradeoff between yield and principal protection.

On August 11 the en banc Fifth Circuit affirmed the district court's vacatur of key portions of the departments' qualifying payment amount methodology in Texas Medical Association v. HHS, the rules governing how plans calculate the benchmark rate that anchors No Surprises Act payment disputes. (Separately, the tri-agencies' July guidance specifying required remittance advice remark codes for No Surprises Act claims takes effect November 1, with mandatory use for items and services furnished on or after January 1, 2027.)

A Massachusetts federal magistrate judge has recommended dismissal of the pension risk transfer suit against AT&T for a second time, finding the transfer was a settlor decision and that AT&T validly delegated annuity provider selection to State Street. One claim survives the recommendation, that State Street did not act with the required independence.

In Liu v. Kaiser Permanente Employees Pension Plan, No. 24-4303 (9th Cir. Aug. 31, 2026), the Ninth Circuit held that the substantial compliance doctrine applies to benefit elections as it does to beneficiary designations, reversing dismissal of a claim by the sister of a participant who submitted a lump-sum election form while hospitalized with cancer and died three days later. The panel rejected the plan's argument that the doctrine is limited to beneficiary changes, and the $676,981 claim proceeds on remand.

In an unpublished decision, the Ninth Circuit vacated class certification in an ERISA fee case involving a defined contribution plan, finding the district court failed to rigorously analyze whether Rule 23's typicality and adequacy requirements were satisfied, and remanded.

The ERISA Industry Committee argued in an amicus brief that Congress and the Treasury Department have long permitted employers' use of unvested funds to offset plan expenses.

Pension plan wrongfully denied benefits to a sister's designated beneficiary where a lump-sum election was not finalized due to illness; the court reversed, holding the substantial compliance doctrine applies.

In Sleep Number's chapter 11, the Bankruptcy Court for the Southern District of New York held that roughly $17.6 million in the company's deferred compensation rabbi trust is property of the estate, leaving plan participants to file general unsecured claims alongside other creditors. The decision underscores that a rabbi trust shields deferred compensation from the employer's change of heart, not from the employer's insolvency.

The quarterly survey tracks health plan design challenges after Barbich v. Northwestern, the forfeiture line following the Eighth Circuit's standing dismissal in Matula, actuarial-equivalence rulings in the Sixth and Eleventh Circuits, and the Supreme Court's withdrawal-liability decision in M&K Employee Solutions, with the Fifth Circuit's en banc surcharge case and Anderson v. Intel on the watch list.

Insurer properly terminated long-term disability benefits where the treating physician's assessments established the claimant could perform sedentary work, satisfying the plan's "any gainful occupation" standard.

In Halloran v. Unum Life Insurance Company of America, No. 25-2550, 2026 WL 2545315 (8th Cir. Aug. 28, 2026), a panel of Chief Judge Colloton and Circuit Judges Gruender and Kobes, with Judge Kobes writing, affirmed the termination of a claimant's ERISA long-term disability benefits. The slip opinion appears in Court Decisions above.

In Laurel Hill Management Services v. La-Z-Boy, the Sixth Circuit held that ERISA preempts out-of-network providers' negligent-misrepresentation and promissory-estoppel claims premised on oral assurances given during benefits-verification calls, reaffirming its 1991 Cromwell precedent. Mayer Brown flags a developing circuit split and counsels administrators to keep call recordings and rely on the written plan when providers claim they relied on the phone call.

In Grice v. Metropolitan Life Insurance Company, No. 25-50566, 2026 WL 2519457 (5th Cir. Aug. 26, 2026), a per curiam opinion, the Fifth Circuit affirmed the district court's grant of summary judgment to Metropolitan Life Insurance Company in this ERISA action challenging the denial of long-term disability benefits.

In Bennett v. Hartford Life and Accident Insurance Company, No. 25-CV-21039-RAR, 2026 WL 2450695 (S.D. Fla. Aug. 21, 2026), United States District Judge Rodolfo A. Ruiz II granted the plaintiff's request to transfer the case out of her chosen forum, while shifting the costs of the move to her.

A settlement milestone rather than a new ruling. The court in Hoak v. Plan Administrator of the Plans of NCR Corp. preliminarily approved the $47.7 million deal for roughly 189 former NCR executives whose top hat plan annuities were converted to discounted lump sums, moving the long-litigated case to a final fairness hearing in November.

In Hudson Hospital OPCO v. Cigna Health and Life Insurance Company, No. 24-2830 (3d Cir. Aug. 26, 2026), the Third Circuit vacated the dismissal of three New Jersey hospitals' ERISA claims that Cigna underpaid them under the plans' MRC-1 and MRC-2 reimbursement provisions, while affirming dismissal of their reasonable-and-customary and fiduciary-duty theories. The partial revival sends a long-running provider-payment dispute back for another round on the plan-terms claims.

Roberts Disability Law walks through the Seventh Circuit's decision in Central States v. McClain, covered here yesterday from the slip opinion, affirming dismissal of the fund's ERISA preemption challenge to Arkansas Rule 128's pharmacy dispensing-fee and reporting requirements.

Kantor & Kantor's weekly survey leads with Laurel Hill Management Services v. La-Z-Boy, where the Sixth Circuit held a provider's claims preempted, reinforcing the circuit split with the Ninth Circuit's Healthcare Ally decision covered here last week. The same edition rounds up the week's district courts, including Kovacs v. Moradi, holding that restricted stock units are not ERISA plans, and Cregan v. Unum, finding that a voluntary accident plan failed the safe harbor on three of four prongs and is therefore ERISA-governed.

In Larkin v. Caremark Rx, No. 1:25-cv-07307 (S.D.N.Y.), participants allege the PBM wrongfully denied coverage for the GLP-1 drug Zepbound on medical-necessity grounds while steering them to Wegovy. According to early reports, the court has now declined to compel arbitration based on an arbitration provision in CVS's website terms of use, letting the ERISA coverage claims proceed. The order itself is not yet publicly posted, and the decision date is unconfirmed.

The Seventh Circuit affirmed dismissal of Central States' ERISA preemption challenge to Arkansas Insurance Rule 128, holding that the state's requirement that health plans pay pharmacies “fair and reasonable” dispensing fees is a cost regulation permitted under Rutledge, and that the rule's companion reporting mandate survives because it exists only to enforce that fee requirement, fitting the narrow room the Supreme Court's Gobeille decision leaves for state reporting duties. The panel flagged that ERISA's newly enacted uniform pharmacy-compensation reporting rules, effective for plan years beginning 30 months after February 3, 2026, may change the analysis later. For self-funded plans, the decision extends Rutledge's reach from reimbursement floors to state-mandated fees and data reporting.

On remand from the Eighth Circuit, a Minnesota federal judge again dismissed the proposed class action claiming Wells Fargo used about $2.2 million in 401(k) forfeitures to reduce its own matching contributions rather than pay plan expenses, this time without prejudice. The ruling turns on standing rather than the merits, so whether the forfeiture-offset practice itself is permissible remains an open question.

Eight federal appellate courts have now held that ERISA plan sponsors cannot use an arbitration clause to strip participants of plan-wide relief, with representative-capacity bars, remedy limits capping recovery at individual accounts, and class-action waivers each failing across ten circuit decisions. The carve-outs sponsors tried instead (exceptions for injunctive relief, savings clauses promising ERISA remedies, general severability language) have each been tested and rejected on appeal, and legacy waiver language drafted before this consensus formed is unlikely to survive a challenge. Nixon Peabody's ERISA litigation team identifies two structures no court has yet foreclosed (delegating arbitrability to the arbitrator and clauses that omit the restrictive language entirely) and advises sponsors to audit existing arbitration provisions now rather than wait for a challenge to test them.

In Mason v. New York Life Insurance Company, a magistrate judge in the Southern District of New York let a long COVID disability claimant pursue narrow discovery outside the administrative record, allowing targeted requests for the financial incentives and performance reviews of the employees who handled her claim while declining broader asks like aggregate denial-rate statistics. The takeaway: conflict-of-interest discovery fares better aimed at the specific people who decided the claim than framed as a search through the administrator's overall track record.

The employer advocacy group warned that litigation challenging wellness program incentives could discourage employers from offering health-related premium discounts.

A federal judge has granted a motion to dismiss a stable value suit, because the plaintiffs “have failed to state any of their claims.” And not for the first time, apparently.

The Ninth Circuit held that ERISA preempts a promissory estoppel claim over a misrepresented reimbursement rate on a benefits-verification call, but not a negligent misrepresentation claim on the same facts, because that injury flows from the false statement itself rather than from interpreting or denying plan terms. Mayer Brown's takeaway for administrators: record verification calls and put coverage representations in writing.

A unit of American Family Insurance and two co-insurers do not have to cover a $40 million settlement paid by a retirement plan administrator accused of failing to catch a years-long fraud scheme carried out by a church executive, a California federal court ruled Thursday.

Lin denied Plaintiff's motion to alter the judgment under Federal Rule of Civil Procedure 59(e) and granted, in a substantially reduced amount, Plaintiff's motion for attorneys' fees and costs under ERISA's fee-shifting provision, awarding $201,195 in fees and $467 in costs against the roughly $350,000 requested.

The first half of 2026 has seen major litigation developments in cases concerning the Employee Retirement Income Security Act (ERISA), including decisions by the U.S. Supreme Court and the U.S. Courts of Appeals for the Fourth, Fifth, Ninth, Eleventh, and D.C. Circuits.

In Mead v. Life Insurance Company of North America, No. 8:24-cv-2756-TPB-AEP, 2026 WL 2444754 (M.D. Fla. Aug. 20, 2026), United States District Judge Tom Barber granted the insurer’s motion for summary judgment and denied the claimant’s cross-motion.

In Cregan v. Unum Life Insurance Company of America, No. 24-CV-340-DES, 2026 WL 2427920 (E.D. Okla. Aug. 19, 2026), United States Magistrate Judge D. Edward Snow addressed whether a voluntary accident policy offered through an employer falls under ERISA.

A federal court in Tennessee denied Cracker Barrel's motion to dismiss in its entirety in a putative class action challenging the tobacco-user premium surcharge in its self-insured health plan, on claims that the plan failed to offer a compliant reasonable alternative standard and failed to give adequate notice of it, both required under the wellness-program nondiscrimination rules. Three days earlier, a Maryland federal judge reached a similar result in a class action over Marriott's $15-per-week tobacco surcharge, letting through a claim that plan communications named a smoking-cessation program without explaining how to enroll or whether enrolling would avoid the fee. Two courts in three days is the pattern worth watching: sponsors running a tobacco surcharge should treat “we offered an alternative” as necessary but not sufficient: notice design, placement, and reimbursement mechanics are now live issues in both cases. (The broader split runs both ways: earlier dismissals went the other way in Williams v. Target and Spencer v. Campbell Soup, so treat this as an emerging, unsettled pattern, not a rule.)

A federal court in Florida dismissed fiduciary-breach and prohibited-transaction claims against Acosta over its use of plan forfeitures to offset the company's own employer contributions rather than pay plan administrative expenses. The dismissal came with leave to amend, so the theory isn't dead for this plaintiff group, but it joins a run of employer-favorable rulings reading plan language that permits either use of forfeitures as foreclosing a violation, echoing an Arizona decision reaching a similar result by a different route in Northcutt v. Gen Digital earlier this month.

An Illinois veterinary clinic agreed to pay $500,000 to settle a proposed class action claiming it invested nearly all of its employees' retirement savings in pharmaceutical and biotech stocks. The theory here is concentration, not fees (an unusual entry in a year dominated by recordkeeping-fee and forfeiture claims), and a reminder that a small plan with an idiosyncratic lineup carries a different risk profile than a large plan with an ordinary one.

Mercer's GRIST desk tallies the pension risk transfer docket after Schoen v. ATI: four district courts have now dismissed PRT challenges for lack of standing while four have let them proceed, with the DOL filing amicus briefs on the sponsor side and noting that no annuity selected in a risk transfer has defaulted in thirty years. The Konya and Doherty appeals are positioned to resolve the split.

Roberts walks through Laurel Hill v. La-Z-Boy, yesterday's Court Decisions lead: the Sixth Circuit's published holding that ERISA preempts out-of-network providers' negligent misrepresentation and promissory estoppel claims over a plan administrator's oral reimbursement assurances, and what it means for providers who rely on verification calls in the Sixth Circuit.

A Michigan federal court denied a disability claimant's motion for appellate attorney fees as untimely, holding the clock ran from the circuit's mandate rather than the district court's later action. Roberts on the timing trap in fee practice after a successful appeal.

A Washington federal court enforced an AD&D policy's aviation exclusion against the widows of two pilots killed in a crash, rejecting the argument that a gap between marketing materials and the certificate changed the result. Roberts on why ERISA mandates no minimum substantive content for coverage.

Mayer Brown flags a federal ruling that restricted stock units can be excluded from the regular rate for FLSA overtime calculations, a helpful data point for employers layering equity onto the pay of overtime-eligible workers.

Akerman breaks down what TMA III actually struck from the QPA methodology: ghost rates, bonus and incentive payments, and the treatment of single-case agreements, and what health plans and insurers should do while the Departments draft replacement guidance.

In a published opinion, the Sixth Circuit held that ERISA preempts out-of-network providers' negligent misrepresentation and promissory estoppel claims based on a plan administrator's oral assurances about reimbursement, affirming dismissal of a suit that sought UCR-rate payment from La-Z-Boy's health plan after Blue Cross allegedly promised it by phone. The panel applied its Cromwell precedent, and Judge Murphy concurred separately to note most circuits allow some misrepresentation claims against administrators. The same week, the Ninth Circuit went the other way on a nearly identical negligent misrepresentation claim in Healthcare Ally v. WSP USA.

In a published opinion by Judge Berzon, the Ninth Circuit held that ERISA does not preempt an out-of-network surgery center's negligent misrepresentation claim over a benefit-verification call in which Aetna said reimbursement would run at the UCR rate, then paid roughly five percent of the bill at the Medicare rate. The provider's injury is its own, not a derivative claim for plan benefits, and letting administrators misstate coverage to providers with impunity would undercut ERISA's purposes. The court still affirmed dismissal of the companion promissory estoppel claim as preempted, and the panel's line falls almost exactly where the Sixth Circuit refused to draw one eight days later in La-Z-Boy.

A California federal court awarded an ERISA disability claimant every dollar of a $227,348 fee request, rejecting the insurer's demand for a 90 percent across-the-board cut despite only partial success on the merits. Roberts walks through the Hummell factors and the lodestar math in a dispute that turned on how covered earnings were calculated.

The trade press catches up to Johnson v. Russell Investment Management, Tuesday's lead here: plaintiffs do not always need an apples-to-apples benchmark to plead imprudence.

ARA situates Johnson in the meaningful-benchmark line that has decided so many recent prudence cases: the Eleventh Circuit's answer is that not every claim needs one, a counterweight to this month's dismissals in Scholin and Hodges.

Kantor & Kantor's weekly survey leads with Healthcare Ally v. WSP USA, where the Ninth Circuit held a provider's negligent misrepresentation claim over a benefit-verification call is not ERISA-preempted. The same edition rounds up a strong week elsewhere, including an Arizona ruling that splits 401(k) forfeiture decisions into settlor plan-drafting and fiduciary allocation choices while dismissing the complaint with leave to amend, and the Seventh Circuit's Alcoa ruling covered here Monday and Tuesday.

In Pedersen v. Kinder Morgan, a Texas federal court granted reformation for a class whose summary plan description failed to disclose a formula that cut a promised 2 percent pension accrual to as little as 1.33 percent, holding per Kantor & Kantor's account that proof of intent to defraud is not required. The court pointed to more than $100 million in employer savings as the unfair advantage supporting the remedy, but ordered individualized relief rather than a blanket award. Another decision, after Cohen and Buckmann's SPD warning Monday, that what a summary omits can be its most expensive feature.

A Massachusetts federal judge vacated the marketplace rule's restriction on coverage of gender-affirming care while upholding several other ACA rollback provisions. A marketplace-side ruling, but one carriers and multi-state plans will be tracking.

Hall Benefits Law reads Kelly v. Altria for plan administrators: the Fourth Circuit's holding that a recordkeeping services agreement is a disclosable plan document raises the stakes on participant document requests, and on what your service agreements actually say.

Roberts breaks down Johnson v. Russell Investment Management, Tuesday's lead: the Eleventh Circuit held a plaintiff need not always offer an apples-to-apples comparator to prove objective imprudence, and qualitative evidence like negative analyst ratings and a fund's unpopularity can carry the point on its own.

Aramark's suit against its health-plan administrator survives dismissal: a Philadelphia federal judge held the company plausibly alleged Independence Administrators acted as an ERISA fiduciary. Plan-sponsor-versus-TPA fiduciary litigation keeps advancing.

A Minnesota district court refused to dismiss a disability claimant's STD and fiduciary claims where the defendants changed their denial rationale along the way. Roberts on why a moving-target denial keeps claims alive past the pleading stage.

ArentFox Schiff calls TMA III what it is: an important but incomplete provider win. Ghost rates and the bonus exclusion are out of the QPA math, while the agencies held the line on excluding single-case agreements.

ARA's take on the 3M ruling that led Tuesday's issue: a fiduciary-breach suit dismissed for lack of a meaningful benchmark got a second chance with the Fidelity Freedom suite as comparator, and made the most of it.

In a published opinion, the Eleventh Circuit reversed summary judgment for Royal Caribbean in the imprudence suit over its proprietary Russell target-date funds, holding that a plaintiff need not identify an apples-to-apples comparator to establish objective imprudence in every case. Qualitative evidence such as a fund's unpopularity and negative analyst ratings can carry the point, and a fund's own custom benchmark is not automatically the only proper measuring stick when the plaintiff's theory is that the benchmark's built-in features are what made the fund imprudent.

On remand from the Supreme Court, Judge Castel split the jury question in the surviving prohibited-transaction claim: the request that fiduciaries make good the plan's losses goes to a jury, because, in the court's words, it is "a 'make good' remedy, and hence legal in nature, to which the plaintiffs are entitled to a jury," while the equitable relief, including removal of fiduciaries, an accounting, and reformation, will be tried by the bench. The order's conclusion reads as a flat denial of Cornell's motion, but the body grants it in part. Both halves matter to anyone tracking whether ERISA fiduciary claims get juries.

Judge Gilliam granted preliminary approval of a $13 million settlement resolving ERISA fiduciary-breach and benefit-denial claims by 220 former Atmel employees over severance under the Atmel U.S. Severance Guarantee Benefit Program: $9.5 million to the class plus $3.5 million in fees, reported to deliver 80 to 100 percent of unpaid severance with interest.

The counterpoint to the 3M ruling, from the same Minnesota federal court: in Scholin v. Digi-Key, Judge Bryan dismissed a challenge to American Century target-date funds because the complaint never explained why its comparator funds were comparable, calling their composition a mystery. Together the two rulings sketch the line between benchmark allegations that survive and ones that don't.

Groom surveys the tobacco-surcharge docket after the trio of July decisions favoring employers, including the Target and Campbell Soup dismissals covered here this week, and asks whether the 75-case wave has crested or is merely regrouping.

The full picture on the Alcoa decision the Digest flagged Monday: Roberts walks through the Seventh Circuit's holding that the CBAs' silence on benefit duration supports class treatment of 3,000-plus pre-1993 retirees, while the judicial-estoppel basis for the retirees' summary judgment win could not stand.

In Klawonn v. Motion Picture Industry Pension Plans, the Ninth Circuit vacated summary judgment for the fiduciaries and sent the case back for evaluation under Anderson v. Intel's prospective-methods standard: prudence is judged by the methods fiduciaries employed, not by whether underperformance was substantial and consistent.

Hall's midyear map of the ERISA litigation plan sponsors should be tracking through the back half of 2026.

More than 3,000 pre-1993 Alcoa retirees sued when the company terminated their lifetime retiree healthcare benefits in 2021. On Friday the Seventh Circuit affirmed class certification, holding that the collective bargaining agreements' silence on benefit duration lets the retirees prove vesting through common evidence, but reversed the summary judgment they had won below, rejecting the district court's judicial-estoppel theory and returning the vesting question to the merits. (Blurb corrected 8/17: an earlier version mischaracterized the dispute as a pension-calculation challenge.)

Polsinelli confirms the en banc Fifth Circuit's August 11 ruling struck the ghost-rate, out-of-specialty, and bonus-exclusion provisions of the QPA methodology, and maps what the recalculation means for payors and plans.

Holland & Knight on a pair of same-day district court dismissals of tobacco-surcharge class actions, against Target in Minnesota and Campbell Soup in New Jersey. The Digest covered the Target ruling August 11; per H&K's account, the companion decisions share a notable post-Loper Bright thread, reasoning that DOL wellness-notice requirements beyond the statutory text are unenforceable.

ARA's plain-language walk-through of Kelly v. Altria: a participant who wanted to liquidate his 401(k) to catch a market uptick, sued when the transfers moved too slowly, and mostly lost on appeal. The practical moral for recordkeepers and plan committees.

Kantor & Kantor's litigation desk reads Kelly v. Altria from the participant side: the Fourth Circuit's holding that a recordkeeping services agreement is a plan document expands what administrators must produce on request, and what statutory penalties attach when they don't.

The Middle District of Florida dismissed most of a pro se participant's LTD underpayment claims as time-barred under the clear-repudiation rule: the limitations clock started when the underpayment was first communicated, not when payments ended. Roberts on the accrual trap that catches long-running benefit disputes.

A new complaint alleges fiduciaries selected underperforming target-date funds, and industry observers read it as a warning shot at wealth firms converging on the retirement plan arena. Fiduciary litigation following the money into the advisory consolidation wave.

The PBGC settled a Title VII promotion-discrimination claim brought by one of its own employees.

Healthcare Dive's news coverage of the TMA III ruling that led Friday's Digest: ghost rates and bonus exclusions are out of QPA math, and payouts to providers are set to rise.

In an unpublished memorandum, the Ninth Circuit affirmed an arbitration award holding that a multiemployer plan actuary's use of PBGC-published interest rate assumptions to calculate withdrawal liability violated ERISA's requirement that assumptions represent the actuary's best estimate of anticipated experience. The plan's 7 percent minimum funding rate applied instead. See The Second Thing above.

another data point on where provider state-law claims survive plan-administration preemption.

Another voice joins the post-Genworth chorus the Digest has been tracking: Holland & Hart on why the era of stipulated or rubber-stamped class certification in 401(k) fiduciary litigation is ending, and how sponsors should adjust their defense posture.

one of the largest 401(k) fee settlements on record, and a checklist of the oversight practices that were alleged to be missing.

Class actions aggregating employee claims against 401(k) plans are big litigation, with gross settlements exceeding $500 million since 2021. Bradley on how the Fourth Circuit's certification reasoning arms defendants, the latest entry in the class-certification story that led yesterday's Digest.

In Healthcare Ally Management v. WSP USA, the Ninth Circuit held ERISA does not preempt an out-of-network surgery center's negligent misrepresentation claim based on an Aetna verification call, while affirming preemption of the promissory estoppel claim.

In City of Tacoma v. Western Metal Industry Pension Fund, the Ninth Circuit affirmed a funding-rate-based recalculation of withdrawal liability, another reminder that contesting multiemployer assessments remains an uphill battle.

A participant sued under ERISA after liquidation-request delays kept him from capturing expected stock gains in his 401(k) account. The Fourth Circuit upheld the denial of his benefits and fiduciary-breach claims but reversed on document production, holding the plan's administrative services agreement must be produced on request.

Encore's fiduciary team surveys the fallout from the Fourth Circuit's Genworth decision calling out the rubber-stamping of broad ERISA classes, and argues the era of automatic certification is ending. The latest chapter in the class-certification story the Digest has followed since the decision came down.

Roberts Disability walks through both halves of Kelly v. Altria: the participant's benefits and fiduciary claims failed, but the administrative services agreement between a plan and its recordkeeper is a plan document ERISA requires administrators to produce on request.

A Third Circuit panel held that ERISA preemption reaches a provider's state-law defamation claims against a Cigna subsidiary, another data point on how far plan-administration preemption extends beyond benefit denials.

The Ninth Circuit affirmed First Unum's denial of long-term disability benefits, holding that prior payment of short-term disability benefits creates no presumption of continuing disability and rejecting the claimant's new-rationale challenge.

On July 22, 2026, the District of Minnesota dismissed a putative class action challenging Target's tobacco surcharge under its employer-sponsored health plan. McGuireWoods reads the decision as a roadmap for the 75-plus pending surcharge suits, a docket readers met in yesterday's Boutwell Fay litigation update.

This month's Friday Five highlights recent court decisions interpreting the ERISA long-term disability any-occupation standard, with practical takeaways for claim administrators and litigators.

After the District of Maryland stayed certain provisions in City of Columbus v. Kennedy, CMS issued a statement acknowledging that provisions scheduled to take effect July 20 or ahead of plan year 2027 will not go into effect as finalized. Groom explains what issuers, and the group plans they serve, should watch next.

A Pennsylvania federal court dismissed a class action challenging ATI's $1.5 billion pension risk transfer to Athene, holding under Thole that retirees whose monthly benefits remain unchanged lack standing, and that the alleged risk of future harm was too speculative. The decision deepens the district-court split over Athene-related de-risking suits, with standing rejected in Schoen, Camire, and Bueno but sustained in Konya and Doherty, both now on interlocutory appeal to the Fourth and Second Circuits. Nixon Peabody's ERISA litigation team advises sponsors to document annuity-provider selection under the DOL's six-factor guidance before closing, since no court has yet reached the fiduciary merits on a developed record.

In Pover v. Capital Group Companies, the Ninth Circuit held a 401(k) plan's arbitration clause unenforceable under the effective vindication doctrine because it barred participants from pursuing representative claims and the plan-wide relief ERISA section 409(a) makes available. Mayer Brown advises sponsors to review existing arbitration language, preserve all arbitrability arguments at the district court, and weigh whether arbitration's benefits still outweigh its limits for plan-wide monetary disputes.

A new 401(k) suit alleges employment discrimination for refusing to offer investment options that don’t invest in fossil fuels.

Thompson Hine tracks the spread of the “financial dominance” theory introduced in Barbich v. Northwestern University, in which participants challenge employer health plan design choices under ERISA, and surveys how the claims are expanding in 2026.

There are now more than 75 tobacco surcharge class actions pending in federal courts across the nation. Since our last article in January 2026, tobacco cessation litigation continues to heat up as cases have now spread to the First, Second, Sixth, Seventh, and Eight Circuit Courts of Appeal.

A health plan seeks to recover medical benefits it paid to a union member after he received a worker's compensation settlement for the same injury, and the court grants default judgment in the plan's favor.

In Havlik, the University of Chicago rejected a beneficiary change form that would have redirected an ERISA-qualified Section 403(b) retirement plan participant’s benefits from his spouse to trusts, and the Seventh Circuit looked to state law to decide whether the power of attorney was valid to waive the spousal benefit.

A suit alleging a breach of fiduciary duty in retaining an allegedly underperforming target-date fund series has been dismissed for lack of a meaningful benchmark comparison.

The court held that Indiana employers may enforce clearly stated vacation-forfeiture policies, and that the Class Action Fairness Act’s home-state exception is not automatic; parties can waive the right to seek remand by waiting too long.

Though the plan document appeared to require arbitration in pursuing recovery in a fiduciary breach suit, a federal appellate court has affirmed a district court decision rebuffing that requirement.

In Stempel v. Unum Life Insurance Company of America, No. 24 C 6077, 2026 WL 2241244 (N.D. Ill. Aug. 4, 2026), the court dismissed an ERISA disability suit for failure to exhaust administrative remedies after the claimant could not establish that he actually mailed his appeal.

Kreps explains that the DOL is “doing more (amicus briefs), making them more public, and submitting briefs in more high-profile issue areas that are ripe with litigation.” He adds that the Department is using these filings to “crack down on what they believe is meritless ERISA litigation.”

In what appears to be the first published federal court decision to squarely address the issue, a federal court in California recently ruled that restricted stock units, commonly referred to as “RSUs,” are excluded from the regular rate of pay under the federal Fair Labor Standards Act.

Federal courts have long applied a highly deferential “abuse of discretion” standard of review to claims for benefits under ERISA Section 502(a)(1)(B)—in other words, a court will uphold a discretionary fiduciary’s decision to deny benefits unless the decision was arbitrary or capricious.

The order reversed key legal conclusions on brokerage-window fee disclosures, but factual disputes over Fidelity compensation stand for trial.

In O’Connor v. Metropolitan Life Insurance Company, No. 4:24-cv-08723-YGR, 2026 WL 2220173 (N.D. Cal. July 29, 2026), Chief United States District Judge Yvonne Gonzalez Rogers granted Plaintiff’s motion for judgment under Federal Rule of Civil Procedure 52 and denied Defendant’s cross-motion.

At a Glance This decision affirms some key ERISA concepts that fiduciary committee members should consider and defendants should emphasize in nearly every lawsuit alleging fiduciary imprudence. The most important principle is that ER.

A novel lawsuit argues employers must offer fossil-fuel-free equity options as a faith-based accommodation, testing the Supreme Court’s Groff decision.

The ADP fiduciary committee will review its retirement plan’s target-date funds as part of the settlement.

ERISA attorneys explain how the widely followed case will affect employers, no matter how the Supreme Court ends up ruling.

A lawsuit tying a worker’s climate objections to his Christian beliefs could set a precedent in the post- Groff landscape, his attorneys argued.

The U.S. Court of Appeals for the Fourth Circuit recently declined to rehear its decision vacating certification of a mandatory class under Federal Rule of Civil Procedure 23(b)(1) in Trauernicht v. Genworth Financial Inc. The Court held that fiduciary-breach claims under the Employee Retirement Income Security Act of

An arm of the Human Rights Campaign launched a class-action lawsuit on Monday challenging the Trump administration’s gender-affirming care coverage ban in federal workers’ health insurance plans.

not because of arguments raised by the fiduciary defendants, but because the plaintiff's arguments were insufficient.

Another federal judge has dismissed a suit by plaintiffs backed by Schlichter Bogard LLC alleging that their pensions were put at risk via a transfer of those obligations to a PE-backed insurance company.

The Seventh Circuit recently affirmed the trial court victory for GreatBanc Trust Company and Segerdahl Corporation’s (sg360°) Board members in the ESOP case, Rush v. GreatBanc Trust Co., et. al, ___ F.

In Munoz v. Alorica, Inc., No. 25-7359, 2026 WL 2199195 (9th Cir. July 30, 2026), former participants in the Alorica 401(K) Retirement Plan brought this action under ERISA on behalf of a putative class.

F.4th —-, No. 24-5298, 2026 WL 2196257 (9th Cir. July 30, 2026), Plaintiff sued her former employer, The Capital Group Companies, Inc., and its fiduciaries on behalf of the company’s defined-contribution retirement plan.

Like several other pro-employer pension risk transfer rulings, the judge said the plaintiffs lack standing to sue as they continued to receive promised benefits.

The Department of Labor urged the court to reject fiduciary breach claims, arguing the plaintiffs’ theory threatens employer flexibility and retirement plan sponsorship.

Employee sued her former employer's retirement plan for fiduciary mismanagement; Ninth Circuit upheld denial of arbitration, finding the plan's class-action waiver unenforceable under ERISA's effective-vindication doctrine.

As discussed in a previous Holland & Knight alert, there has been an emerging wave of Employee Retirement Income Security Act of 1974 (ERISA) class actions challenging employers' tobacco-free wellness programs.

The article explores the recent increase in litigation involving tobacco cessation programs and the compliance issues employers should consider.

On June 11, the U.S. District Court for the Northern District of California issued the first-ever ruling to squarely address whether restricted stock units must be included in the regular rate of pay when calculating overtime under the Fair Labor Standards Act.

On July 7, 2026, the U.S. Court of Appeals for the D.C.

Memorial Hermann Health System, a Texas nonprofit hospital system, has settled a suit under the Employee Retirement Income Security Act (ERISA) relating to 401(k) plan fees and fund choices.

Bessemer System Federal Credit Union sued TruStage Financial Group days after a cybersecurity incident forced TruStage, which serves 93% of U.S. credit unions, to shut down its systems and lock members out of 401(k) plans. The suit is an early test of whether institutional clients can hold a vendor liable for cybersecurity failures based on operational disruption alone, without proof that data was actually stolen.

A closer read of the Bessemer FCU filing against TruStage shows the complaint specifically alleges some credit unions temporarily lost employee access to 401(k) and other retirement accounts when TruStage shut its network down after the July 15 breach. A concrete look at how a recordkeeping vendor's outage becomes a retirement-plan access problem for plan sponsors.

A vendor-risk-management take on the TruStage outage, aimed at institutions that rely on outside providers for retirement and investment account services. Steve Fochler walks through practical steps for assessing exposure and preparing a response before a critical vendor's own incident becomes an operational problem for your own members or participants.

Defendant Greebel appealed the district court's rejection of a settlement agreement to garnish his 401(k) to satisfy a criminal restitution order, and the Second Circuit reversed, holding the parties' proposed garnishment orders complied with the prior mandate.

Roberts Disability Law, P.C. secured a procedural win for its client in Goldman v. Unum Life Insurance Company of America, No. 3:26-cv-01022-LJC, —F.Supp.3d—-, 2026 WL 2184768 (N.D. Cal. July 21, 2026), where United States Magistrate Judge Lisa J.

In Raya v. Barka, No. 25-2394, __ F.4th __, 2026 WL 2168772 (9th Cir. July 28, 2026), Plaintiff sued his former employer, Calbiotech, Inc., several individual defendants, and Calbiotech’s 401(k) Profit Sharing Plan and Pension Plan, asserting ERISA claims for denial of benefits, breach of fiduciary duty.

A recent decision by the Seventh Circuit Court of Appeals in Havlik v. University of Chicago highlights the importance of promptly resolving deficient retirement plan beneficiary changes and designations.

Plaintiffs filed two new ERISA suits on June 23, 2026. Both target the same fiduciary duty, and both push the theory onto new ground.

Ajeti v. Life Insurance Company of North America, No. 26-3249, 2026 WL 2150163 (E.D. Pa. July 27, 2026), addresses whether ERISA governs, and preempts, state-law claims brought by foreign nationals seeking disability benefits under a plan established by their American employer.

The groups are asking the Fourth Circuit to maintain a district judge’s verdict in Stana v. SAS Institute Inc.

The U.S. Supreme Court recently ruled that the Employee Retirement Income Security Act (ERISA) does not require multiemployer pension plans to use actuarial assumptions to calculate withdrawal liability adopted before a certain deadline.

Ajeti v. Life Insurance Company of North America, No. 26-3249, 2026 WL 2150163 (E.D. Pa. July 27, 2026), addresses whether ERISA governs, and preempts, state-law claims brought by foreign nationals seeking disability benefits under a plan established by their American employer.

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The groups are asking the Fourth Circuit to maintain a district judge’s verdict in Stana v. SAS Institute Inc.