Retirement plan lawsuit news in 2026 is dominated by one story: ERISA class actions are running at near-record volume, driven by an April 2025 Supreme Court ruling that made them easier to file and by plaintiffs’ firms testing new theories against a wider range of employers. Plaintiff firms filed 155 ERISA fiduciary class actions in 2025, and roughly 70 more proposed class actions landed in just the first quarter of 2026.1401kSpecialist. 155 ERISA Fiduciary Lawsuits Filed in 2025 as Litigation Broadens2Bloomberg Law. ERISA Class Actions Soar in 2026 as New Legal Theories Emerge Since 2023, more than 120 excessive-fee settlements have totaled over $665 million.3Mayer Brown. The Evolution of Defined Contribution Plan Class Action Litigation in 20254401kSpecialist. Which 401(k) Plans Get Sued and Why5Encore Fiduciary. Summary of 2025 State of ERISA Excessive Fee Litigation
Recent Settlements Worth Knowing
The headline numbers have been large, though what individual participants receive is usually modest. The median per-participant payout in 2025 settlements was $67.79, while plaintiffs’ attorneys collected an average of $1.59 million per case.1401kSpecialist. 155 ERISA Fiduciary Lawsuits Filed in 2025 as Litigation Broadens
UnitedHealth Group — $69 million. A court approved the Snyder v. UnitedHealth Group settlement in June 2025, resolving claims that UnitedHealth retained poorly performing Wells Fargo target-date funds to preserve a business relationship with Wells Fargo. The settlement covers more than 350,000 participants, and distributions began in October 2025.6UnitedHealth Group ERISA Settlement. Snyder v. UnitedHealth Group Settlement7Sanford Heisler Sharp McKnight. UnitedHealth Certified ERISA Class Action
Liberty Mutual — $13.4 million. On the eve of a jury trial in January 2026, the parties in Ahmed v. Liberty Mutual Group settled allegations of excessive recordkeeping fees and underperforming investments. The case had run nearly six years and generated more than 105,000 pages of discovery and 22 depositions.8NAPA-Net. Schlichter Bogard Wrests a Big 401(k) Excessive Fee Settlement
Ruane Cunniff & Goldfarb — $124.6 million. The Department of Labor sued this investment manager in 2019 after the DST Systems retirement plan became so concentrated in a single pharmaceutical stock that it grew to more than 45% of plan assets. The settlement was intended to restore funds to over 9,000 participants.9U.S. Department of Labor. DOL Announces Settlement With Ruane Cunniff and Goldfarb
Wells Fargo — $32.5 million. In Becker v. Wells Fargo, plaintiffs alleged the company funneled nearly $5 billion in 401(k) assets into proprietary target-date funds with no prior track record that underperformed benchmarks by roughly 2%. A federal judge granted final approval in August 2022, covering an estimated 400,000 class members.10InvestmentNews. Wells Fargo Agrees to Pay $32.5 Million to Settle 401(k) Lawsuit11Cohen Milstein. Wells Fargo 401(k) Litigation
The Supreme Court Ruling That Changed the Landscape
On April 17, 2025, the Supreme Court decided Cunningham v. Cornell University unanimously. The Court held that ERISA’s statutory exemptions for certain transactions are affirmative defenses that defendants must raise and prove, not elements that plaintiffs must disprove in a complaint.12Justia. Cunningham v. Cornell University In practical terms, a plaintiff can now survive a motion to dismiss simply by alleging that a plan fiduciary caused the plan to enter a transaction with a party that had a financial interest in it.13Groom Law Group. Cunningham v. Cornell: Supreme Court Lowers Bar for ERISA 406 Claims
The effect showed up quickly. In 2025, ERISA plaintiffs achieved a 95% success rate on class certification, which is what pushes so many of these cases into settlement.2Bloomberg Law. ERISA Class Actions Soar in 2026 as New Legal Theories Emerge The Court acknowledged concerns about meritless “strike suits” and pointed to tools district judges can use to filter them: detailed replies to affirmative defenses, dismissal for lack of concrete injury, limits on discovery, and sanctions for bad-faith filings.12Justia. Cunningham v. Cornell University Courts have in fact continued to dismiss some prohibited-transaction claims on standing grounds, or because plaintiffs failed to show the counterparty qualified as a party-in-interest.14Trucker Huss. Prohibited Transactions Post-Cunningham v. Cornell University
What Plaintiffs Are Suing Over Now
Target-Date Fund Performance
Target-date funds, the default investment for most 401(k) participants, have become the leading target. In early 2026, more than a dozen suits were filed against plans using American Century Investments’ target-date suite, all alleging the funds should have been replaced. The complaints used substantially similar language, and observers described them as copycat filings. In March 2026, an Ohio federal judge dismissed one of them, finding the allegations amounted to “modest underperformance” that could not support an inference of imprudence.2Bloomberg Law. ERISA Class Actions Soar in 2026 as New Legal Theories Emerge15Mealeys Litigation. Amid Surge in ERISA Suits Over American Century TDFs, Judge Grants Dismissal
A larger case landed in April 2026. East v. Principal Global Investors Trust Company accuses Principal of steering assets from roughly 7,800 retirement plans into proprietary, high-fee index funds that tracked benchmarks less accurately than competitors. The complaint alleges Principal’s S&P 500 index product charged 0.13% at year-end 2024, compared to 0.02% for rival products. Defendants’ response was due July 6, 2026.16InvestmentNews. Class Action Accuses Principal of Self-Dealing in Target-Date Retirement Funds17PACER Monitor. East et al v. Principal Global Investors Trust Company et al
Plan Forfeiture Disputes
Since September 2023, about 60 class actions have challenged a common employer practice: using forfeitures (the unvested balances employees leave behind) to offset the employer’s own contributions rather than pay plan expenses or boost participant accounts. Federal regulations permit this when plan documents authorize it, and the DOL has not historically objected. Plaintiffs argue it is nonetheless a fiduciary breach.18Mayer Brown. The Current State of the Law in ERISA Forfeitures Cases
Courts have mostly sided with employers. Of 28 suits that reached the motion-to-dismiss stage by late 2025, 24 were dismissed.19Gibson Dunn. Update on ERISA 401(k) Plan Forfeiture Litigation20Plan Sponsor. Capital One to Settle 401(k) Forfeiture Case21Plan Sponsor. DOL Requests Oral Argument Time in HP Forfeiture Case
Stable Value Funds
Stable value fund challenges jumped more than 500% in 2025, with 27 suits arguing that fiduciaries accepted lower crediting rates than comparable fixed-income alternatives would have paid. About 10% of early 2026 filings continued the trend.3Mayer Brown. The Evolution of Defined Contribution Plan Class Action Litigation in 20252Bloomberg Law. ERISA Class Actions Soar in 2026 as New Legal Theories Emerge
Tobacco Surcharges in Health Plans
More than a quarter of early 2026 ERISA filings involved tobacco surcharges in employer health plans, alleging that employers impose premium penalties on tobacco users without adequate cessation programs or disclosure. Results have been mixed. In Noel v. PepsiCo, a Southern District of New York judge dismissed with prejudice a challenge to a roughly $900-per-year surcharge in February 2026. Ascension Health defeated a similar suit that same month. Appeals are pending in the First and Second Circuits.2Bloomberg Law. ERISA Class Actions Soar in 2026 as New Legal Theories Emerge22Pro Policyholder. Maximizing Insurance Coverage for Emerging Tobacco Surcharge ERISA Litigation
New Theories Being Tested
Climate Risk
In March 2026, former Cushman & Wakefield employee Renee Kvek filed what her attorneys called the first lawsuit alleging a 401(k) fiduciary failed to protect a plan from climate-related financial risks. Kvek v. Cushman & Wakefield, filed in the Western District of Washington, targets the inclusion of the Westwood Quality SmallCap Fund in a plan with about $1.7 billion in assets and over 23,000 participants. The complaint alleges the fund is “openly indifferent to climate risk,” charges high fees, and has persistently underperformed its benchmarks.23Cohen Milstein. First-of-Its-Kind Lawsuit Filed Against Cushman and Wakefield24ESG Dive. Cushman and Wakefield Class Action Lawsuit Climate Risk 401(k) Retirement Plan Defendants filed motions to dismiss and to stay discovery on May 7, 2026.25Climate Case Chart. Kvek v. Cushman and Wakefield US Inc.
The Anti-ESG Case
A separate case has pushed in the opposite direction. In Spence v. American Airlines, a Northern District of Texas judge ruled in January 2025 that American Airlines breached its duty of loyalty by allowing corporate ESG goals and the interests of its investment manager, BlackRock, to influence retirement plan management. Judge Reed O’Connor found no breach of prudence but issued a permanent injunction requiring independent investment committee members and annual certifications that plan decisions would exclude ESG, DEI, or sustainability criteria. Monetary damages were denied; the court awarded roughly $4.6 million in attorney’s fees to the plaintiff in February 2026.26Climate Case Chart. Spence v. American Airlines Inc.27Law360. Spence v. American Airlines Inc. et al
The Bloomberg Case
In January 2026, Sanford Heisler Sharp McKnight filed Rajappan v. Bloomberg, alleging Bloomberg L.P. retained two “chronically underperforming” funds in its $5 billion 401(k) plan for more than a decade. The complaint estimates participant losses between $79.9 million and $197.8 million from the Harbor Capital Appreciation Fund (16 years of alleged underperformance) and the Parnassus Core Equity Fund (10 years). The proposed class covers roughly 20,000 current and former participants.28Sanford Heisler Sharp McKnight. Bloomberg L.P. ERISA Class Action29BenefitsPRO. Bloomberg Hit With $70M ERISA Lawsuit Over Decade of 401(k) Underperformance
Pushback From Courts and Congress
Not everything has run plaintiffs’ way. In March 2026, the Fourth Circuit ruled in Trauernicht v. Genworth Financial Inc. that fiduciary-breach losses are “inherently individualized” because they vary with timing, investment choices, and account balances, and therefore may not justify mandatory class treatment under Federal Rule of Civil Procedure 23(b)(1).30Virginia Lawyers Weekly. 4th Circuit Reverses ERISA Class Cert Genworth If other circuits adopt the reasoning, it would blunt the class-certification leverage that drives many settlements.
Congressman Randy Fine introduced the ERISA Litigation Reform Act (H.R. 6084) in late 2025. The bill would raise pleading standards for ERISA claims, require excessive-fee plaintiffs to demonstrate that fees were unreasonable, and pause discovery until a court rules on any motion to dismiss.31Congressman Randy Fine. ERISA Litigation Reform Act The House Committee on Education and the Workforce advanced the bill on a 19-to-13 party-line vote in March 2026; it awaits Judiciary Committee review before any full House vote.32Plan Adviser. House Committee Passes GOP Legislation That Seeks to Reduce ERISA Litigation
The Department of Labor has also weighed in on the forfeiture wave. In January 2026, the agency filed an amicus brief taking the position that using forfeited funds to offset employer contributions, when plan documents authorize it, does not violate ERISA.33U.S. Department of Labor. EBSA FY2025 Monetary Results That position could carry weight as the pending forfeiture appeals move through the circuits.
What to Watch
Several decisions in the next year will shape whether the current pace holds. The Ninth Circuit’s ruling in Hutchins v. HP and the pending Third and Eighth Circuit appeals will set the direction on forfeiture claims. First and Second Circuit rulings on tobacco surcharges will do the same for that theory. The motion to dismiss in Kvek v. Cushman & Wakefield will produce the first judicial test of the climate-risk theory on the merits. And whether the ERISA Litigation Reform Act clears the House Judiciary Committee will determine whether the pleading standards plaintiffs now enjoy under Cunningham get rewritten by Congress. For now, the volume of new filings is still rising, and the settlement pressure created by a 95% class-certification rate is still doing most of the work driving cases toward payouts.