155 ERISA Fiduciary Lawsuits Filed in 2025 as Litigation Broadens
Plaintiff law firms filed a near-record high 155 ERISA fiduciary class action lawsuits in 2025—and while 401(k) plans remain the dominant target, allegations are expanding beyond retirement plans into health plan litigation in a significant manner, according to a new report out Feb. 9 from Encore Fiduciary.
While defined contribution plans accounted for 98 of the suits, health plans accounted for 39 as health plan fees are increasingly being scrutinized by plan participants and plaintiff firms in the wake of the Consolidated Appropriations Act of 2021, which included provisions to increase fee disclosure requirements from service providers to health plans.
The report, “ERISA Fiduciary Litigation in 2025: 155 Class Actions, Broader Theories, and No Sign of Slowing,” shows companies sponsoring ERISA plans continue to be under attack by plaintiff firms. And the numbers behind the trend are the real wake-up call: “Settlements continue to stack up, often driven by the economics of surviving a motion to dismiss, while participant recoveries remain modest compared to attorney payouts,” states an Encore Fiduciary LinkedIn post announcing the report’s release (more on participant recoveries and attorney payouts below).
Fees and forfeitures targeted
With the help of the Dorsey & Whitney law firm, Encore Fiduciary tracked these lawsuits and found that in addition to 401(k) plans remaining the most frequent target, there is an increased focus on plans in the $250M-$750M range and, as in prior years, lawsuits alleged excessive recordkeeping and/or investment fees. Many lawsuits specifically cited plan fees should have been reduced by the application of forfeitures to offset administrative expenses.
The report also notes that lawsuits alleging imprudent investments shifted focus from the suite of target date funds (typically the QDIA in the plan) to stable value funds. A total of 27 lawsuits were filed challenging the inclusion of stable value funds, alleging they had crediting rates lower than other alternative fixed income investments available in the market.
Suits persist despite falling fees
More than 600 excessive fee and imprudent investment lawsuits have been filed against ERISA defined contribution plans over the last 10 years, not counting Employee Stock Ownership Plans (ESOPs). These lawsuits contain allegations such as plan recordkeeping fees or investment fees being too high, plan forfeitures should have been used to offset plan expenses instead of offsetting future employer contributions, and/or plan investment performance is lower than alternative options.
The report says excessive fee lawsuits remain concerning because they have increased significantly even as 401(k) recordkeeping and investment fees have steadily declined across all plan sizes over the past decade. Multiple industry studies show that large plans already have very low fees, which the report says undermines the premise that litigation is driven by excessive participant costs. Yet plaintiff firms increasingly target these plans anyway, suggesting the lawsuits are less about actual fees and more about litigation strategy.
In addition, an estimated one in four large 401(k) plans has faced an excessive fee or performance lawsuit in the past 10 years, despite large plans representing less than 3% of all DC plans and typically having the lowest fees.
“Plans with the highest fees almost never face an excessive fee lawsuit, while plaintiff firms target the 3% universe of plans with the lowest fees charged to participants,” writes report author Justin Bove, Chief Revenue Officer and Fiduciary Lead for Encore Fiduciary. “Plaintiff firms can leverage higher settlements from larger plans, which is why they continue to be targeted over smaller plans.”
Forfeiture allegations have increasingly appeared in excessive fee lawsuits, with plaintiffs arguing that unvested employer contributions should be used to offset plan administrative fees rather than reduce future employer matching contributions. Encore Fiduciary’s analysis found that although most courts have dismissed these claims at the motion-to-dismiss stage, many of those rulings have been appealed, keeping the issue alive at the appellate level.
The Department of Labor under the Trump administration has sided with plan sponsors, filing an amicus brief in Hutchins v. HP warning that a plaintiff-friendly ruling could ultimately harm participants. That was one of four recent amicus briefs filed by the DOL supporting retirement plan sponsors.
“A reading of these briefs reveals the DOL’s thoughtful approach shifting from a ‘pro-plaintiff’ focus to a ‘pro-system’ focus, siding against plaintiffs in individual cases while concentrating on the bigger picture to ensure that employers can continue to provide good retirement and health benefits to employees without the threat of being sued,” Bove wrote.
However, plaintiff firms have continued to pursue forfeiture claims despite the DOL’s stance, filing numerous additional lawsuits and securing at least one significant settlement (Singh v. Capital One Financial Corporation), leaving the long-term legal impact uncertain until appellate courts weigh in.
Substantial settlement activity
The report’s conclusion notes that most excessive fee lawsuits never go to trial, but a majority (60-65%) survive the motion-to-dismiss stage, forcing plan sponsors and fiduciary insurers into costly discovery. Faced with the prospect of spending millions on litigation, many sponsors settle, giving plaintiffs significant leverage despite having no intention of taking most cases to trial.
More than 30 cases were settled in 2025 alone, with average settlements exceeding $3 million, and over $1.3 billion paid out across more than 200 settlements in the past 5 years. While plaintiff firms typically collect about one-third of these amounts—roughly $450 million—individual plan participants receive relatively modest benefits, averaging just $55 to $70 each, according to a recent analysis from the Davis & Harman law firm along with Encore Fiduciary’s own calculations.
Small per-participant awards
In January, Davis & Harman published a survey covering 2025 settlements involving ERISA class action lawsuits against defined contribution plan sponsors in underperformance and excessive fee cases, with the terms of 27 settlements being disclosed.
The median of the average per-participant award was just $67.79 compared to an average plaintiffs’ attorneys’ fees of $1.59 million.
“These findings illustrate the enormous gap between plaintiffs’ lawyers’ fees and the participant recoveries in the increasingly common wave of ‘sue and settle’ cases,” the survey noted.
The average per-participant award in all the 2025 settlements was $892.19, a figure that was dramatically skewed by a single outlier awarding over $16,000 to individual class members. If that outlier were removed, the average for 2025 would be $291.67.
Check out the “Encore Fiduciary Litigation in 2025” report from the Fid Guru blog at this link.
SEE ALSO:
• $70 Million ERISA Lawsuit Filed Against Bloomberg 401(k) Alleging Plan Mismanagement
• DOL Files Fourth Amicus Brief Backing Plan Sponsors in Forfeiture Suits
• Record-Breaking $69 Million Settlement in UnitedHealth 401(k) Case Finalized
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.