ERISA Lawyers Weigh In on Recent Cases, Aronowitz Confirmation

As ERISA complaints from plan participants persist, legal experts say recent case dismissals are unlikely to curb the wave of litigation. However, they believe higher court rulings or confirmation of Daniel Aronowitz to lead the Department of Labor’s Employee Benefits Security Administration could play a key role in slowing the trend.

Aronowitz, during his confirmation hearing before the Senate Committee on Health, Education, Labor and Pensions earlier this month, pledged to halt what he described as “regulation by litigation.” The committee is scheduled to consider the nomination again on June 26.

Regarding the ongoing wave of litigation, several reports from law firms that focus on Employee Retirement Income Security Act issues indicate that there were more than 100 ERISA cases filed in 2024, with some estimates identifying more than 50 new cases filed so far this year.

Plaintiffs continue to file complaints for several reasons, lawyers say. Recent cases have been filed to test legal theories, because of the low bar to survive a motion to dismiss, and due to how easy some complaints—notably forfeiture claims—are to file.

“It’s easy to copy and paste forfeiture information from the Form 5500 into a complaint and then copy and paste it repeatedly,” says Rick Nowak, a partner in law firm Mayer Brown who specializes in ERISA litigation. “Because it’s easy, firms could continue to both file stand-alone claims against particularly larger plans, but they also could then attempt to try to amend existing cases to add a forfeiture claim relatively easily.”

While new cases continue to be filed, plaintiffs in ongoing cases have had mixed success—some settlements and many dismissals. In one settlement, UnitedHealth Group settled for $69 million a case that alleged the company did not replace an underperforming fund in its plan.

In a separate deal, Intuit settled for $2 million a case that alleged it misused plan forfeitures, an argument that has recently been dismissed by other courts in separate cases. Legal experts say settlements are a win for plaintiffs but say the settlement figures likely indicate that plan sponsors felt settling was less costly than fighting the complaint in court.

Dismissals have also increased, with federal judges tossing out plan forfeiture claims against J.P Morgan and Wells Fargo this month alone.

“What every plan sponsor can do now is straightforward: Review the plan language and make sure that those documents reflect the current forfeiture practices. That’s something that every plan can do,” says Nate Ingraham, a senior managing associate at the Thompson Hine law firm, where he represents benefit plans, employers and fiduciaries on ERISA issues.

In the case of plan forfeitures, the IRS has consistently taken the position that money forfeited to the plan by participants whose company contributions had not yet fully vested can be used to pay plan expenses, to reduce employer contributions or to make an additional allocation to participants. Legal experts say the plan sponsors that clearly state in their plan documents how such funds can be used in the plan are more than likely to stave off litigation.

Aronowitz, an expert in insurance for employee benefit providers, including ERISA fiduciaries, said during his confirmation hearing that he wants to make clear that fiduciaries, not the DOL or plaintiff lawyers, decide what is best for retirement plan participants. He also said he is looking forward working to end “litigation abuse.”

“Continuing to develop more judicial opinions, including any appellate precedent, combined with the potential for EBSA weighing in with amicus briefs, could be a powerful combination and could thwart the momentum in these cases,” Ingraham says.

The Senate Committee on Health, Education, Labor and Pensions is expected to consider Aronowitz’s nomination on Thursday, when he is expected to be approved. He would then face a vote of the full Senate.

If he is approved by the Senate, Aronowitz will take charge of EBSA, which enforces ERISA and related regulations, safeguarding employer-sponsored retirement, health and welfare benefits for workers and retirees. In the congressional hearing earlier this month, Aronowitz repeatedly said he would try to reduce litigation by offering clearer regulatory guidance.

“Aronowitz is focused on the idea that ERISA was designed to protect participants and beneficiaries from losing their benefits, but also to encourage companies to offer these benefits in the first place, because nothing in the law requires you to offer a 401(k) plan,” Nowak says. “Nothing requires you to do a matching contribution. So if now you can’t use forfeitures to offset contributions, that could discourage companies from making discretionary contributions. I think he will look for ways to provide guidance while staying consistent with ERISA.”