ERISA class action litigation did not let up in 2025. Retirement plan fee litigation – which has dominated for several years – remained steady, with new, or in some cases refined, theories targeting 401(k) forfeitures and stable value fund performance. Additionally, this year saw a boom in litigation surrounding tobacco surcharges and continued litigation concerning health plan fees.   

The takeaway is clear: ERISA disputes have expanded well beyond their traditional boundaries, with plaintiffs testing fiduciary obligations in new and unexpected ways.

Fee and Investment Litigation Continues to Evolve

Traditional excessive fee lawsuits remain a major share of ERISA filings, but the contours of those claims are shifting.

A key development in 2025 involved the growing focus on stable value funds, which historically attracted little scrutiny compared to target-date funds or actively managed equity options. Plaintiffs are now alleging that certain stable value funds delivered below market crediting rates or underperformed to allegedly comparable (but typically distinguishable) conservative alternatives. These claims often accompany the familiar allegations of unreasonable recordkeeping or administrative fees.  To date, approximately 30 cases challenging stable value funds have been filed since the beginning of the year. 

Motion to dismiss outcomes, however, remain mixed.  Some courts have dismissed complaints that rely on hindsight or fail to offer meaningful benchmarks.  Others have permitted cases to proceed based on modest allegations of underperformance or excessive fees, reinforcing the fact-specific and jurisdiction-dependent nature of these disputes.  With some exceptions, defendants have prevailed on the merits when cases proceed to summary judgment and trial.

One trend worth noting:  settlement values in fee cases appear to be declining, signaling a recalibration of litigation strategies on both sides. 

Forfeiture Litigation In Focus

One of the most notable developments of 2025 is the surge in lawsuits challenging how employers use 401(k) forfeitures — the unvested employer contributions left behind when employees depart.  Plaintiffs argue that plan sponsors breach fiduciary duties when they apply forfeitures to offset future employer contributions rather than to pay plan expenses otherwise paid by plan participants.  To date, more than 80 cases have been filed since the wave began back in 2023, with over 30 cases having been filed just since May of this year.

Courts across the country have been actively addressing motions to dismiss on forfeiture litigation, and in most instances, the motions have been granted.  As of this writing, defendants’ motions to dismiss have been granted in 25 cases and denied in just five.  

Class Action Litigation Finds Health Plans

Recent years have seen new lawsuits challenging what ERISA group health plans pay for prescription drugs.  These cases have faced major obstacles, as motions to dismiss were granted in two cases this year for lack of standing.  While these initial health plan fee cases have had a sputtering start, they remain pending and we may continue to see more activity in this area.

Conversely, litigation targeting tobacco surcharges, which took off in late 2024, continued to explode throughout 2025.  To date, over 50 cases have been filed; almost half in 2025 alone.  These lawsuits allege that tobacco surcharges violate ERISA’s anti-discrimination provision by charging plan participants more for medical benefits based on their health status.  The allegations center around the “reasonable alternative standards” that employers offer plan participants for avoiding surcharges, rewards offered for satisfying those standards, and the timing, form, and content of notices about tobacco surcharges.  Early motions to dismiss have teed up issues regarding statutory and regulatory interpretation, standing, and the reach of the DOL’s regulatory powers.  And, while some courts have trimmed certain claims – particularly fiduciary breach claims – or found that particular fact patterns warranted dismissal, courts have largely deferred on deciding the core issues until later in litigation.  

While 2026 will hopefully bring more clarity on these issues, these lawsuits highlight a broader trend: plaintiffs are increasingly scrutinizing health and welfare plan design.

What Plan Fiduciaries Should Expect in 2026

The 2025 wave of ERISA litigation continued to build upon the trends we saw last year, reaching deeply into both retirement and health plan administration.  As plaintiffs continue expanding their theories, strong plan governance, detailed documentation, and proactive compliance reviews will remain essential in limiting liability exposure. 

If you have questions about these developments, the Jackson Lewis ERISA Litigation Practice Group is available to assist.  Please contact a Jackson Lewis ERISA Litigation team member or the Jackson Lewis attorney with whom you regularly work.