BENEFITS DIGEST

A week after the Anderson v. Intel argument, Quarles’s appellate and benefits teams predict the Court will affirm the Ninth Circuit and require a meaningful comparison investment in suits over fund performance, with the real question being how much guidance the opinion gives. The lawyers highlight two exchanges from the argument. Justice Kavanaugh observed that half of all funds will always sit below the median. Justice Barrett pressed whether calling an apple an apple requires criteria, suggesting even the plaintiffs had conceded the principle and were only fighting about its content. And the Labor Department’s pending fiduciary proposal already defines a meaningful benchmark for funds holding alternative assets, so sponsors may face the question no matter how the case ends. The firm’s advice is to document the objectives behind each investment selection now.

Ballard Spahr’s Edward Rogers and Brian Pinheiro expect the Court to require meaningful investment comparisons, but offer two cautions for sponsors. First, a win for Intel may change less than headlines suggest, since every circuit except the Sixth already requires some form of meaningful benchmark, and the Court may adopt a less demanding version than some circuits apply, with the Solicitor General urging a test requiring only that a comparator share the challenged fund’s goals. Second, the flow of underperformance suits hasn’t slowed since the Supreme Court agreed to hear the case, and most lower courts have kept dismissing complaints for failing to plead benchmarks, as though expecting the Court to uphold that requirement. The authors flag the moment plaintiffs’ counsel conceded that performance allegations require some inherent comparison, which several justices treated as giving up the core of the appeal.

The Supreme Court’s Intel argument focused on how similar investments must be before comparing their returns can support a claim that a 401(k) plan was mismanaged. Nevin Adams’ recap works justice by justice. Kagan accused the participants’ counsel of attacking a caricature of the Ninth Circuit opinion, which she read as requiring comparable objectives and risk rather than identical investments. Gorsuch kept pulling the discussion back to the question presented, benchmarks for underperformance claims only, and Kavanaugh pressed the difference between results and prudence, noting a sound strategy can lose money while an imprudent one profits. Barrett asked how to define meaningful without inviting lower courts to demand a twin. Intel’s counsel conceded that comparators need not share asset allocations and that risk-adjusted tools exist, and the government argued plaintiffs can plead imprudence without any comparator when they are not relying on underperformance. Adams reads the argument as receptive to requiring a meaningful comparison, with the real fight over how much content the word carries.

Encore Fiduciary and Davis & Harman catalog the Anderson argument justice by justice and set it inside the circuit split, with the Second, Seventh, Eighth, Ninth and Tenth Circuits requiring a meaningful benchmark in fee or underperformance cases while the Sixth and Eleventh do not. Two threads stand out in their account. Justices Kavanaugh and Gorsuch pressed whether poor performance alone can ever show a breach, given that the duty of prudence is about a fiduciary’s process, and Justice Kagan pushed for the Court to say what meaningful requires, worrying that some lower courts already demand comparator funds with identical asset allocations, which she suggested goes too far.

The distinction that matters in Groom’s recap of the Anderson argument is between claims built on investment performance and claims attacking the decision-making process. The Ninth Circuit required a meaningful benchmark only when a plaintiff asks the court to infer imprudence from how an investment performed; a complaint that pleads facts about a flawed fiduciary process directly does not need a comparator at all. At argument, the justices appeared broadly agreed that performance-based claims need an apples-to-apples comparator, and the open question is how much content the Court will give the word meaningful, with a fund’s objectives, risk-adjusted returns and stated benchmarks among the candidates. Groom expects a decision at the beginning of next year.

Business and benefits groups have urged the Fourth Circuit to reject a challenge to Northrop Grumman's use of 401(k) forfeitures. Participants say the money should have reduced their administrative expenses rather than the company's contributions. The groups argue that ERISA doesn't require fiduciaries to provide benefits beyond those promised by the plan. Hall Benefits Law summarizes the competing positions in appeal No. 26-1258.

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 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.

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.

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

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.

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

The organization’s amicus brief backed Intel and warned that allowing lawsuits based on hindsight would fuel costly litigation and harm 401(k) participants.

Amicus briefs by the Department of Labor and the employer group warned the Supreme Court to not allow lawsuits under ERISA based solely on an investment fund’s underperformance.

The company argues that claims of underperformance should be judged against a meaningful, comparable benchmark.

The court dismissed the second amended complaint against EssilorLuxottica with prejudice on October 23, ending the 401(k) suit over the plan’s stable value fund. The participants’ comparator funds were inadequately explained and didn’t match the challenged investment, the court found, and the challenged fund’s time in the plan only briefly overlapped the class period. A recordkeeping-fee count went beyond the limited permission to amend the court had granted, a procedural ruling rather than a finding that the fees were reasonable, and the monitoring claim fell with the rest. Nothing in the order decides whether the plan’s investment process was actually prudent. The plaintiffs never pleaded enough to put that question to a trial, and for sponsors the ruling adds to the line of cases requiring apt comparator funds before an investment suit proceeds.

Johnson & Johnson filed a supplemental-authority letter telling the Third Circuit that the Supreme Court’s denial of review in Aldridge leaves intact the Sixth Circuit’s limit on monetary relief for fiduciary-breach claims like the drug-pricing fee suit against it. The Supreme Court’s refusal to hear the case settles nothing on the merits and isn’t an endorsement of the lower court’s reasoning. The filing is advocacy in a pending appeal, and the Third Circuit hasn’t ruled.

Thermo Fisher is asking a court to dismiss an employee’s claim that its 401(k) plan should offer a fossil-fuel-free investment option to accommodate his Christian beliefs. In its [dismissal brief](https://digest.theinnerfirm.com/docs/hartley-thermo-fisher-dismissal-brief-2026-10-13.pdf), the company argues that the federal claims were filed too late and that the same investment menu was available to everyone, and it disputes whether the requested menu change qualifies as a religious accommodation at all. The motion remains pending. These are the employer’s arguments, not a ruling on whether the requested investment option is a required accommodation.

A former Husch Blackwell partner couldn’t establish an ERISA violation by treating the firm’s year-end profit-sharing contributions as employee wages withheld from pay. Hall Benefits Law reports that the court granted summary judgment for the firm because the disputed amounts weren’t plan assets before they were deposited. The court distinguished a partner’s draws from employee wages and rejected the argument that further discovery was needed before ruling. The result turns on the contributions and arrangement before the court. It doesn’t authorize employers to retain employees’ withheld salary deferrals or use plan assets for operating expenses.

After a six-day trial, a Massachusetts federal judge [ruled](https://digest.theinnerfirm.com/docs/stephan-v-trader-joes-ffcl-2026-09-28.pdf) in Stephan v. Trader Joe’s Co. that the grocer’s 401(k) fiduciaries breached their duties on recordkeeping fees. The committee had never sought competitive bids or negotiated fees with its recordkeeper of more than fifteen years. The defendants prevailed on the investment claims and on claims involving forfeitures, employer contributions that departing workers hadn’t earned the right to keep. The award is $715,264, an overpayment the court measured from the recordkeeper’s own unprompted fee cut, plus prejudgment interest that brings the total near $1.2 million, and the court rejected the plaintiffs’ $9.2 million damages theory. Wagner Law Group’s Andrew Oringer calls the outcome sobering. The committee had checked the market, but the court found its efforts insufficient. PLANSPONSOR places the ruling in the forfeiture wave, 48 such complaints filed in 2025 against 29 the year before, with courts dismissing similar claims against AT&T, Home Depot and JPMorganChase.

The last claim standing in Phillips v. Cobham Advanced Electronic Solutions, the 401(k) suit against the aerospace company now owned by Honeywell, was that the plan refused participants' request for its investment policy statement, a failure that can carry personal penalties under ERISA. Judge Eumi Lee ended the case without deciding whether an investment policy statement is among the documents a plan must furnish; these plaintiffs lacked standing to ask. Two had cashed out their accounts about two years before the 2022 request, the third offered no evidence she would have done anything differently, and a missing document is not an injury by itself without some downstream consequence. The prudence claims over the plan's American Century target-date funds were dismissed last year under the Ninth Circuit's Anderson v. Intel decision, which the Supreme Court reviews on October 6. Anderson asks what investment comparisons participants must offer to support a claim that retirement-plan options performed poorly.

Every investment option in Federated Hermes' own $660 million 401(k) plan was a Federated fund, and a participant alleges that 17 of them trailed the benchmarks the plan's own fiduciaries had chosen, that one fund stayed on the menu while outside investors pulled more than $1 billion from it, and that the plan paid roughly double what similar plans paid for recordkeeping. Judge Robert Colville let nearly everything proceed: the prudence claims on both fund selection and fees, the loyalty claim (participants plausibly served as a captive investor base for the firm's fund business), and both prohibited-transaction claims, applying the Supreme Court's Cunningham rule that the exemption allowing in-house funds is a defense for the company to prove, not a hurdle for the participant to clear. Only the failure-to-monitor count was dismissed, with 21 days to replead. A footnote points to the Supreme Court's October 6 argument in Anderson, on what comparisons participants must offer to support claims that retirement-plan investments performed poorly, and the court here invited the parties to seek new briefing if that decision bears on this ruling.

A retrospective on six July decisions: the Ninth Circuit's refusal to compel arbitration in the Capital Group 401(k) self-dealing suit, the largely denied dismissal motion in the O'Reilly Automotive tobacco-surcharge case, Elevance's forfeiture-suit dismissal with 40 days to amend, the standing-based dismissal of the ATI and State Street pension risk transfer suit, the Dish Network target-date-fund case ordered to trial, and the D.C. Circuit's partial reversal of a $13 million withdrawal-liability judgment won by the IAM National Pension Fund.

A federal judge dismissed the amended retirement-plan complaint against Legacy Health, its board, and its retirement committee. The plaintiffs have 30 days to try again. Judge Adrienne Nelson found the stable-value claims failed for want of a meaningful benchmark: none of the 13 comparator funds was alleged to be the same kind of guaranteed investment contract, and the court held the Ninth Circuit's approach to comparing investment funds, now under Supreme Court review in Anderson and set for argument October 6, applies to stable-value challenges too. A T. Rowe Price growth fund claim failed because underperformance against one benchmark, standing alone, doesn't plead imprudence. On forfeitures, the court joined the majority view that applying forfeitures to employer contributions, as the plan expressly permitted, is neither disloyal nor imprudent without more, found the anti-inurement claim failed because the money never left the plan, and noted the Ninth Circuit's pending Hutchins appeal on the same question.

Very few 401(k) fee cases reach trial. After a six-day bench trial, Judge William Young [found breaches](https://digest.theinnerfirm.com/docs/stephan-v-trader-joes-ffcl-2026-09-28.pdf) of the duties of prudence and loyalty in how the plan's recordkeeping fees were managed, found the company and its board failed to monitor the investment committee, and ordered the company to restore $715,264 to the plan, plus $471,957 in prejudgment interest, just under $1.2 million in all. The committee never sought competing bids through a request for proposals or information and never negotiated with Capital Group, the plan's recordkeeper and a trustee since at least 2009. The plaintiffs sought about $9.25 million, but the judge was not persuaded that the plan could have obtained their expert's proposed $21-per-person fee. He instead used Capital Group's unsolicited reduction from $48 to $40 per participant as evidence of what the committee could have negotiated earlier. Trader Joe's won everything else. The forfeiture claim failed mid-trial because the plan document assigns forfeiture allocation to the company, and the amounts used to offset contributions went straight into participant accounts. The claims over the plan's only actively managed large-growth fund failed because the watch-list process, quarterly reviews, and the addition of an index-fund alternative added up to a sufficiently robust process.

The wave of 401(k) forfeiture lawsuits produced [another employer win](https://www.napa-net.org/news/2026/9/mortgage-lender-prevails-in-401k-forfeiture-suit/). Three former employees of United Wholesale Mortgage claimed the plan committee breached its fiduciary duties by using forfeited employer contributions to reduce the company's future contributions instead of paying administrative expenses that participants otherwise bear. On September 23, Judge Susan DeClercq [dismissed the case](https://digest.theinnerfirm.com/docs/lapko-v-uwm-opinion-2026-09-23.pdf). The plan says the committee "may" use forfeitures for expenses and that amounts not used that way "shall" reduce company contributions, and the court held ERISA's duty of loyalty cannot "convert its permissive language into an obligation." Forfeitures remain plan assets subject to fiduciary duties, the court acknowledged, but nothing in the plan or the statute entitles participants to have them spent on expenses, and pointing to an alternative use does not by itself make the chosen use imprudent. The prohibited-transaction claims failed on Sixth Circuit precedent, though the court noted that courts elsewhere disagree. Here, the court rejected the argument that ERISA required the committee to use forfeitures for expenses when the plan made that use optional.

A lawsuit challenging Dish's choice of retirement funds can proceed toward trial. In Jones v. Dish Network, a certified class of about 17,000 participants in Dish's $1.6 billion 401(k) plan alleges the plan held on to Fidelity Freedom Funds despite years of underperformance against similar funds. The court declined to end the case before trial because disputed facts remain, and faulted the record on the company's side. Per the alert, Dish "hasn't provided a substantive fund performance analysis that would allow a decision on the duty of prudence issue."

Dismissed with prejudice, and a clean illustration of the meaningful benchmark standard doing its work. Participants in Ameritas' own $779 million 401(k) plan attacked the fees under the in-house group annuity contract, alleging the plan would have paid $10.56 million in 2021 if charges ran at half the contract's 2.5 percent and 0.5 percent caps. The court called that arithmetic purely speculative: the complaint pleaded contractual maximums, never actual fees, and its comparator, aggregate Brightscope/ICI industry averages, was the same benchmark the Eighth Circuit rejected in Barrett and Matousek because it says nothing about comparable services. The loyalty and monitoring claims fell as repackaged imprudence, and an informal request to amend, made in a brief rather than by motion, was denied.

A class action against Philips North America over its $5.7 billion 401(k) plan survived dismissal in full last Thursday, in a ruling that touches both of the season's litigation waves at once. The prudence claim alleges the plan held onto a Prudential stable value fund while comparable guaranteed investment contracts outperformed it by an average of more than 40%, and the court held that First Circuit precedent protecting conservative investments did not control because the complaint identified specific steps the committee never took, requesting proposals from providers and negotiating the crediting rate. Whether the comparators are meaningful is a question of fact for discovery. The forfeiture claim survived on the loyalty theory. The court acknowledged the majority rule that steering forfeitures to reduce company contributions does not breach the duty of loyalty, then reasoned that a fiduciary who always exercises that discretion for the employer and never for participants, without ever investigating the alternative, may plausibly have acted out of self interest. The same theory survived in the Penn State Health case covered yesterday and failed for good in Lithia Motors.

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.

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.

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.

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.

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.

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.

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.

A Minnesota federal judge allowed target-date imprudence and self-dealing claims against 3M to proceed after finding the amended complaint's Fidelity Freedom fund comparison a meaningful benchmark, while narrowing other theories. The suit was dismissed this spring with leave to amend for exactly this deficiency, so the ruling shows what a benchmark allegation that works actually looks like.

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.

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.)

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.

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.

The Third Circuit affirmed summary judgment for a 401(k) plan sponsor in In re Quest Diagnostics ERISA Litigation, holding that ERISA's duty of prudence is a process-based inquiry. A sound fiduciary process, not investment results, defeats a breach claim, and permissive investment-policy-statement language preserved the committee's discretion to retain underperforming funds.

A proposed class action accuses United Rentals and its retirement committee of allowing excessive recordkeeping fees and using forfeitures to reduce employer contributions instead of participant expenses. Forfeitures are employer contributions that workers leave behind before earning the right to keep them. The complaint describes a plan with about $2.64 billion and 27,059 participants in 2025 and alleges more than $2.5 million in excessive fees. It also challenges the treatment of roughly $14.37 million in forfeitures generated over six years. These are the plaintiff’s allegations, and the court has not ruled on liability or certified a class.

Three former HP employees filed a would-be class action in the Northern District of California on October 7 over two collective investment trusts holding about $2.53 billion, 23.3% of the $10.85 billion 401(k) plan. The [complaint](https://digest.theinnerfirm.com/docs/ohara-v-hp-complaint-2026-10-07.pdf) alleges the large-cap fund trailed its Russell 1000 benchmark in 9 of 11 calendar years from 2015 through 2025 and the small and mid-cap fund in eight, and estimates roughly $313 million in foregone returns for 2021 through 2025 against comparator averages, an illustration by the plaintiffs rather than money removed from accounts or an adjudicated loss. Both funds also sat inside all 12 of the plan’s default Birth Date funds. Separate counts invoke Cunningham v. Cornell to challenge recordkeeping, revenue-sharing and plan-administration payments, though Fidelity, SEI and Callan are not defendants, and the complaint itself says late contributions were corrected with lost earnings in 2024. Every figure above is the plaintiffs’ account.

A former participant in Rockland Trust’s roughly $300 million 401(k) plan filed a would-be class action in the District of Massachusetts on October 7, alleging the bank, its board and its plan committee kept the actively managed T. Rowe Price Growth Stock Fund on the menu through a decade of underperformance. The [complaint](https://digest.theinnerfirm.com/docs/labelle-v-rockland-trust-complaint-2026-10-07.pdf) says the fund trailed its own benchmark, the Russell 1000 Growth Index, over the trailing three-year, five-year and ten-year periods in every year from 2019 through 2025. It also underperformed six comparator funds across 94% of common risk-adjusted metrics, performance measures that account for investment risk, in the two years before the proposed class period. Counts for imprudence and failure to monitor seek plan-wide losses, and the allegations are untested.

Three former employees sued HP and its plan committee on October 7 in San Jose federal court over two custom funds in the company’s $10.85 billion 401(k) plan, the U.S. Large Cap Equity Fund and the U.S. Small/Mid Cap Equity Fund. The complaint alleges the large-cap fund trailed the Russell 1000 index in nine of the eleven calendar years from 2015 through 2025 and the small/mid-cap fund trailed the Russell 2500 in eight of eleven, underperformance it says was visible on the funds’ own fact sheets and the Fidelity screens shown to participants. The two funds held about 23 percent of plan assets and sit inside all twelve of the plan’s Birth Date Funds, the investments used for participants who don’t make their own selections. The complaint therefore also seeks compensation for losses suffered by participants who never selected either fund directly, and it estimates plan losses above $300 million. The suit brings distinct prohibited transaction claims as well, over the plan’s recordkeeping and revenue-sharing payments to Fidelity, its payments to HP itself for administrative services, and employee contributions deposited late in seven straight years, delays the plan’s own filings classify as nonexempt prohibited transactions. The plaintiffs argue that their chosen comparisons meet the standard the Supreme Court is considering in the Intel case.

Two participants in Principal’s $4.6 billion Select Savings Plan allege the menu is Principal top to bottom, with the only exceptions company stock, two SEI trust funds and a brokerage window. The sharpest allegation goes to fees on five insurance investment accounts. The participants claim Principal Life keeps between 19 and 37 percent of the management fee on those accounts even though outside firms manage the investments. A second count challenges the proprietary target-date funds, built on Principal index funds the complaint says cost several times what BlackRock, Northern Trust and Vanguard charge for the same exposure, and the retention of a large-cap growth fund that trailed the Russell 1000 Growth index in every reported period. Chimicles Schwartz Kriner and Ellzey Kherkher filed September 22 in Chicago federal court. Principal hasn’t yet responded in court.

Two of the country's largest insurance brokerages now face lawsuits over fees in their own employees' voluntary benefits programs, both brought by the same plaintiffs' firm, Capozzi Adler. Seven Gallagher employees [sued Arthur J. Gallagher](https://digest.theinnerfirm.com/docs/raynes-v-gallagher-complaint-2026-09-17.pdf) in Chicago on September 17, and four Marsh & McLennan employees [followed in New York](https://digest.theinnerfirm.com/docs/wilmer-v-marsh-mclennan-complaint-2026-09-25.pdf) on September 25. Both complaints allege the companies helped oversee their employees' benefit plans while also acting as brokers for the coverage, products like life, vision, disability, accident, and legal insurance. Employees paid the premiums through payroll deductions, and the companies collected commissions and administration fees built into those premiums. A Labor Department exemption keeps truly voluntary programs outside ERISA when the employer does not contribute, endorse the program, or profit from it, and the complaints allege each company's involvement and compensation put the programs outside that exemption. According to the Marsh complaint's tables, Marsh and its affiliates received about $8.4 million in life-insurance commissions and administration fees from 2012 through 2024, and commissions alone rose from $75,000 in 2014 to $556,724 in 2015, when the recipient changed to another Marsh subsidiary. [NAPA counts](https://www.napa-net.org/news/2026/9/gallagher-gets-added-to-vbo-suit-suite/) eight lawsuits over fees in voluntary employee benefits since last December, and Marsh makes at least nine. The courts have not ruled on these allegations, and neither company has responded.

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.

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.

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.

NAPA reports the proposed $209,000 settlement in Hebert v. Rick Case, the suit over a market value adjustment, a charge deducted from participants’ stable-value holdings when the plan changed recordkeepers in 2022. The gross recovery is about 80% of the $263,278.78 the class alleges it lost, with an estimated $145,929.34, about 55%, reaching participants after proposed fees, expenses, and administration costs, all subject to court approval. The defendants deny wrongdoing, and the [preliminary-approval motion](https://digest.theinnerfirm.com/docs/hebert-v-rick-case-prelim-approval-motion-2026-10-14.pdf) carries the terms.

Ramboll’s U.S. units and their plan committees have agreed to pay $750,000 to settle a class action over the stable-value option in the Ramboll US Retirement & Savings Plan, a plan with more than 3,000 participants. The February complaint alleged the fiduciaries kept the Prudential Guaranteed Income Fund while comparable guaranteed investment contracts credited more interest, and the parties settled in July with a dismissal motion pending and before any ruling on the merits. Plaintiffs’ October 16 [preliminary-approval papers](https://digest.theinnerfirm.com/docs/jones-v-ramboll-prelim-approval-memo-2026-10-16.pdf) put potential class damages at $3 million to $4 million against conservative comparators, making the deal 19% to 25% of their own best case before fees and expenses. Requested fees run up to a third of the fund, and the [settlement](https://digest.theinnerfirm.com/docs/jones-v-ramboll-settlement-agreement-2026-10-16.pdf) allocates the net amount according to participants’ holdings in the disputed investment, with deposits to active accounts and checks to former participants. Ramboll denies wrongdoing, and the proposal is before Judge Brenda Sannes.

Cognizant’s proposed $2.8 million settlement of a 401(k) lawsuit has hit a preliminary-approval setback. Participants allege excessive recordkeeping costs and imprudent investment choices, according to their [settlement brief](https://digest.theinnerfirm.com/docs/milano-v-cognizant-settlement-brief-2026-09-29.pdf); Cognizant denies wrongdoing. In an [October 13 order](https://digest.theinnerfirm.com/docs/milano-cognizant-ecf133-docket-excerpt-2026-10-13.pdf), Judge Michael Farbiarz said the submitted evidence focused on how the parties negotiated the deal rather than why its terms deserved approval. He required detailed, case-specific support and denied preliminary approval without prejudice, allowing a renewed request. Agreement between the parties has not yet established that this retirement-plan settlement is fair to participants.

Twenty years of excessive-fee litigation have made retirement-plan governance a recurring litigation issue. Lockton reviews the evolution of claims involving investment options, service-provider compensation and fiduciary oversight, along with the financial and insurance consequences of defending them. The article emphasizes records of decision-making and attention to the way coverage responds when claims arise. A settlement doesn’t necessarily establish that a plan’s process was unlawful, and insurance doesn’t substitute for that process. Lockton’s perspective is that sponsors should consider litigation readiness and coverage alongside ongoing plan administration.

Five former Wells Fargo employees allege that the company’s 401(k) fiduciaries kept three investments despite years of weak results, costing participants roughly $1.04 billion compared with the alternatives identified in their complaint. The targets are a custom large cap growth fund that trailed its disclosed index and four named peer funds on every standard measuring window from 2018 through 2025, a small cap fund the complaint says should have been removed at the end of 2022, and the State Street target date series the $58 billion plan adopted as its default investment in March 2023 despite a published record behind two of the three comparator series. To support each comparison, the plaintiffs match the funds on holdings, sector weights, risk and fees, and offer three benchmarks apiece, the fund’s own disclosed index, an investable index fund tracking it, and a set of peer funds. A separate count alleges the plan kept paying investment fees to an affiliated manager for fourteen months after Wells Fargo settled an earlier suit over the same plan for $32.5 million in 2022. Wells Fargo hasn’t yet responded in court.

Cognizant has agreed to a $2.8 million settlement of a 401(k) lawsuit filed in December 2020. Participants alleged excessive recordkeeping fees and poorly performing investment options. The court hasn't ruled on the merits, and the settlement still needs approval. The deal came out of mediation, with both sides accepting the mediator's proposal in June. Plaintiffs' counsel values it at about 21 percent of a $13.4 million best-case recovery; attorney fees of up to a third of the fund, $150,000 in expenses, and $10,000 awards for each of the five named plaintiffs would come out of it. The settlement class, roughly 40,000 participants at its peak year, wouldn't be allowed to opt out under the proposed settlement.

The recordkeeping and managed-account fee case that nearly reached a jury: filed in 2020, certified in 2023, and settled on January 14, 2026, twenty-six days before trial. Early funding grew the common fund to $13,524,410.05 for roughly 136,000 participants, and only two class members objected. Beyond the money, the deal bars the plan's recordkeeper in writing from cross-selling to participants for three years and requires an RFP for investment and administrative consulting. A companion order awarded class counsel one third in fees, $4,507,685.87—notably a 0.62 multiplier on lodestar, meaning counsel took less than its hourly value—plus $400,962.86 in expenses and $20,000 apiece for the six named plaintiffs.

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.

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.

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

NCR Corp. has settled a class action lawsuit for almost $48 million. The five former executives and their spouses who filed the Employee Retirement Income Security Act (ERISA) suit claimed that the software company failed to provide them with lifetime annuity payments, contrary to its promises.

The deal, if approved by a federal district court in California, would require updates to future pension calculations.

Roughly 15,000 current and former NCR Savings Plan participants can proceed together in their recordkeeping-fee lawsuit. Judge Jones certified the class on September 10, covering the fees the plan paid between February 2017 and January 2024, which the suit says were far higher than a plan that size should pay. NCR had every new hire sign a class action waiver starting in 2018, and it did not stop certification. Recovery on these claims would go to the plan, and the court held the waiver unenforceable as a prospective waiver of the statutory right to sue on the plan's behalf. The Ninth and Eleventh Circuits reached the same result last year. Whether the fees were excessive is still to be decided.

The case behind today's One Thing. McCalla v. USI Insurance Services was filed September 8 in the Southern District of New York, with a class period running from September 2020 and counts for prohibited transactions under section 1106(b) and breach of the duty of loyalty, seeking disgorgement and USI's removal as fiduciary. It is the sixth case in the voluntary benefits genre and the first brought by Capozzi Adler rather than the Schlichter firm behind the earlier five. [NAPA's writeup](https://www.napa-net.org/news/2026/9/insurance-co.-slapped-with-erisa-fiduciary-vbo-suit-by-participants) ran September 9.

The Prudent Investment Fiduciary Rules blog proposes a quantitative framework for documenting fiduciary prudence, combining cost-comparison metrics with AI-assisted process tools. Dense, but of interest to committees formalizing their prudence files.

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.

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.

Watkins applies his terminal-wealth breakeven framework to in-plan annuities, arguing that fiduciaries weighing guaranteed-income options should quantify what participants trade away for the guarantee rather than rest on qualitative prudence claims.

The DOL’s proposed prudence safe harbor regulations have pretty much made it “table stakes” for some responsible person somewhere to read and understand any annuity contracts on behalf of the plan which are provided as part of any DC lifetime income program.

Modern portfolio construction has historically emphasized maximizing expected returns for a given level of risk.

Former employees at American Express (Amex) have filed suit alleging that the credit card company maintained underperforming funds in its 401(k) plan, including target-date funds (TDFs).

That changed in late 2025, when four putative class actions were filed against large employers and their benefits consultants. The cases seek to apply now all-too-familiar retirement plan excessive fee theories to voluntary insurance products.

Jim Watkins’ recent article on fiduciary prudence protocols is one of the best practical guides I have seen for investment committees. It is written as a roadmap for plan sponsors who genuinely want to satisfy ERISA’s prudence requirements before selecting an investment.

Over the past several years I’ve worked as an investment expert with ERISA plaintiff law firms helping investigate and file more than 40 fixed annuity excessive fee and prohibited transaction lawsuits. Just Scratching the Surface.

They really should be fully understood by the fiduciaries involved in the selection and maintenance any lifetime income program, especially if one is attempting to comply with the DOL’s proposed prudence safe harbor.

The Third Circuit’s decision in Johnson v. Quest Diagnostics, Inc. was a recent bright spot for ERISA litigation in a sea of mostly depressing news. The plaintiffs in the Quest case brought suit alleging that the retention of two underperforming actively managed funds in Quest’s 401(k) plan was a fiduciary breach.

EBSA sent its replacement for the 2022 Biden-era ESG rule to OIRA on June 30, 2026; agenda target release July 2026. Expected to restrict fiduciary consideration of climate/social factors under the