ERISA Litigation Update

Key Takeaway: The US Supreme Court granted certiorari in Anderson v. Intel Corporation (No. 25-498) on January 16, 2026. Slated for next term, Anderson will address the plaintiffs’ pleading burden for underperformance-based ERISA imprudence claims. 

Anderson arises from a decision by the Ninth Circuit Court of Appeals that affirmed the dismissal of ERISA imprudence claims. The plaintiffs alleged that the fiduciaries of Intel’s 401(k) plan breached their duty of prudence by including plan investment options with exposure to hedge funds and private equity funds. (Goodwin previously reported on the Ninth Circuit’s Anderson decision in our July 2025 “ERISA Litigation Update” and on the Anderson petition in our January 2026 “ERISA Litigation Update.”) Rejecting the complaint’s allegations as insufficient, the Ninth Circuit held that “when a plaintiff alleges imprudence based on a fiduciary’s decision to make one investment [available] rather than an alternative,” the plaintiff must allege “a meaningful benchmark” against which to compare the performance of the at-issue investment. 

While the Second, Seventh, Eighth, Ninth, and Tenth circuits have now adopted varying formulations of the “meaningful benchmark” standard, the Sixth Circuit recently rejected the standard in a decision that is the subject of another pending cert petition, Parker-Hannifin v. Johnson (No. 24-1030). In Parker-Hannifin, the Sixth Circuit held that a meaningful benchmark was not required to adequately allege an imprudence claim premised on fund underperformance. For now, the Court appears to be holding Parker-Hannifin. After rendering a decision in Anderson, the Court might send Parker-Hannifin back to the Sixth Circuit for reconsideration in light of Anderson.  

The Court will hear Anderson in October 2026 or later. When it does, it will likely find the government arguing in favor of the “meaningful benchmark” standard. At the certiorari stage in Parker-Hannifin, the Solicitor General urged the Court to reverse the Sixth Circuit, arguing that “[p]laintiffs pursuing a relative-underperformance theory must identify a meaningful benchmark for comparison.” 

Key Takeaway: The Fourth Circuit held that class certification under Federal Rule of Civil Procedure 23(b)(1) — the rule under which most 401(k) plaintiffs seek class certification — is not appropriate where plaintiffs seek monetary relief to individual plan accounts in a 401(k) plan. 

On March 10, 2026, the Fourth Circuit Court of Appeals reversed certification of a class of 401(k) participants certified under Rule 23(b)(1) in Trauernicht v. Genworth Financial. The plaintiffs brought suit against Genworth Financial, Inc., related to its 401(k) retirement plan, alleging breaches of fiduciary duties in selecting and retaining certain investment options. On August 15, 2024, the district court certified a mandatory class under Rule 23(b)(1), which does not require notice and does not allow for opting out, rather than a class under Rule 23(b)(3), which does require notice and does allow for opting out. 

The Fourth Circuit granted Genworth’s petition for interlocutory appeal and reversed the certification order on two grounds: (1) certification was improper under Rule 23(b)(1), and (2) the district court failed to conduct a “rigorous analysis as to the class action prerequisite of commonality” under Rule 23(a)(2). With respect to Rule 23(b)(1), the Fourth Circuit’s reasoning focused on the distinction between a defined contribution plan (such as 401(k) plans), in which the assets of the plan are allocated to participants’ individual accounts and participants’ benefits are based solely upon the amounts held in their individual accounts, as compared with a defined benefit plan, in which the assets of the plan are undifferentiated and held collectively in a plan account used to pay the fixed benefits promised to all plan participants. The court held that “in the context of a defined contribution plan, a participant’s damages claim . . . is an ‘individualized monetary claim’” that cannot be certified under Rule 23(b)(1). As to commonality, the Fourth Circuit relied on similar reasoning to reject the argument made by the plaintiffs and adopted by the district court that claims like the plaintiffs’ are “inherently” common, and it held that the district court failed to conduct the required rigorous analysis as to whether commonality was satisfied. The Fourth Circuit wrote that the district court should have considered, among other arguments, Genworth’s arguments that many class members did not suffer harm. 

On March 25, 2026, the plaintiffs filed a petition for rehearing en banc. As of the date of this publication, the Fourth Circuit has yet to decide that petition. 

Key Takeaway: The Third Circuit affirmed a district court’s grant of summary judgment in favor of defendants, emphasizing that ERISA’s duty of prudence focuses on process and holding that the evidence indicated the defendants maintained a prudent process for selecting and monitoring the investment options offered in a company’s 401(k) plan.

On January 9, 2026, the Third Circuit Court of Appeals affirmed summary judgment for Prudential Insurance Company of America, its plan committee, and individual committee members in Cho v. Prudential Insurance Company of America. The complaint alleged that the fiduciaries of Prudential’s 401(k) plan violated ERISA’s duty of prudence by retaining purportedly imprudent proprietary and affiliated investment options. The district court granted Prudential’s motion for summary judgment in December 2024, holding that the plaintiff failed to raise a triable issue of fact as to whether the defendants engaged in a prudent process in reaching investment decisions. The plaintiffs appealed.

On appeal, the Third Circuit affirmed the district court’s ruling and found that the plaintiffs could not present a triable issue of fact whether defendants acted imprudently or failed to monitor the Prudential plan’s investment options. In so holding, the Third Circuit emphasized that the plan’s investment committee (1) engaged an external investment consultant to assist it by identifying investment options, conducting due diligence, evaluating plan investment options, and providing fiduciary guidance; (2) met on a quarterly basis to independently assess the plan’s investment options; (3) actively discussed portfolio performance and reviewed any investments potentially warranting additional scrutiny or removal at quarterly meetings; and (4) received and thoroughly reviewed substantive materials provided by the investment consultant and an internal support team in advance of those quarterly meetings. The Third Circuit agreed that this process was adequate to satisfy ERISA’s prudence standard. In rejecting plaintiffs’ attempt to rebut this evidence, the Third Circuit first noted that there was no indication that defendants passively accepted the consultant’s recommendations. Rather, the record indicated that the investment committee independently reviewed and discussed the investment options and their benchmarks before coming to decisions. Last, the Third Court rejected the plaintiffs’ claim that the investment committee favored or failed to adequately review proprietary or affiliated investment options in the plan, and it determined that the record established that the investment committee evaluated, selected, and monitored each of the plan’s investment options — including proprietary and affiliated investment options — using the same process and consistently deployed a thorough investigation process before adding any fund to the plan. 

Key Takeaway: District courts continue to weigh in on pension risk transfer (PRT) claims, with recent decisions resulting in dismissals. Two PRT cases are now before appellate courts, and in one, the Department of Labor (DOL) has submitted an amicus brief in support of the defendants.

Key developments over the past quarter include the following:

Two Motions to Dismiss Have Been Granted

District courts have continued the trend of dismissing claims challenging the selection of annuity providers in PRT transactions.

On January 8, 2026, in Dempsey v. Verizon Communications, Inc., the United States District Court for the Southern District of New York dismissed the plaintiffs’ suit against Verizon and State Street Global Advisors Trust Company, holding that the plaintiffs failed to establish standing, plead a breach of fiduciary duty, or state a prohibited transaction claim under ERISA. On standing, the court found the plaintiffs failed to plausibly allege that the selected annuity providers faced a substantial risk of default. Instead, the alleged risks reflected common industry practices and did not establish a substantial risk of future harm. On breach, the court held that ERISA does not require fiduciaries to select the safest possible annuity provider. Rather, plaintiffs must allege that no reasonable fiduciary would have made the same selection. Last, the court dismissed the prohibited transaction claims for failure to allege necessary elements of the claim. Among other things, the court found that the annuity providers were not parties in interest because the sale of an annuity contract is not the provision of services.

On March 31, 2026, in Maneman v. Weyerhaeuser, the United States District Court for the Western District of Washington dismissed claims against Weyerhaeuser and State Street Global Advisors Trust Company. Unlike Dempsey, the court found that the plaintiffs adequately alleged standing based on a present injury — namely, a promise to pay from a less reliable provider. The court, however, dismissed the complaint for failure to state a claim for breach or for prohibited transactions. As to breach, the court found that nearly all of the allegations concerning the risks posed by the selected annuity provider postdated the PRT and therefore were not probative of fiduciary prudence or loyalty. As in Dempsey, the court also dismissed the prohibited transaction claims, concluding that the annuity provider was not a service provider and thus not a party in interest.

Goodwin represents State Street Global Advisors Trust Company, which served as an independent fiduciary, in the Dempsey and Maneman matters.

DOL Weighs in on PRT Litigation in Favor of Employers and Fiduciaries

On January 9, 2026, the DOL filed an amicus brief in support of the defendants in the Konya v. Lockheed Martin Corporation appeal currently pending before the Fourth Circuit Court of Appeals. The DOL explained its view that the plaintiffs lack standing because they have continued to receive their benefits payments in full following the PRT. The DOL also asserts that, if not curtailed, the current wave of litigation over PRTs could harm workers because employers may choose not to offer benefits due to litigation risk. This is the first public position the DOL has taken on the recent wave of PRT litigation.

Key Takeaway: The District Court of Minnesota has twice dismissed claims challenging the Wells Fargo health plan’s prescription drug costs, ruling that the plaintiffs lacked standing to bring their claims.

On March 3, 2026, the United States District Court for Minnesota dismissed an amended complaint filed against Wells Fargo in Navarro v. Wells Fargo & Company that challenged Wells Fargo’s management of its prescription drug program, finding that the plaintiffs failed to cure the standing defects the court identified in a previous order dismissing the claims (which Goodwin analyzed here). The plaintiffs’ core theory was that Wells Fargo breached its fiduciary duties by mismanaging the company’s prescription drug benefits plan, resulting in higher premiums and out-of-pocket costs for plan participants. The amended complaint added an additional plaintiff, who was a current participant in the plan, and added additional factual allegations, including that Wells Fargo had negotiated lower prescription drug prices with its pharmacy benefit manager after the plaintiffs filed the initial complaint. 

The court again dismissed the plaintiffs’ claims for lack of standing. The court found that the plaintiffs’ claims that they paid higher premiums or higher out-of-pocket costs due to the alleged breach were still too speculative to confer standing. With respect to premiums, the court held that the plaintiffs had not adequately alleged injury-in-fact because Wells Fargo had sole discretion to set participant contribution rates, and moreover, such amounts may be affected by several factors having nothing to do with prescription drug benefits. With respect to out-of-pocket costs, the court found that the plaintiffs’ theory was effectively an attempt to argue that they should have received better or different benefits than they were guaranteed under the plan. 

On April 1, 2026, the plaintiffs filed a notice of appeal to the Eighth Circuit. 

Speaking engagement: 2026 NAPA 401(k) Summit (April 19 – 21, 2026)

Jamie Fleckner is speaking on a panel titled “ERISA Litigation Applied to Your Practice,” which will break down the hottest trends in ERISA litigation, explain what the courts are saying (and where the circuits differ), and translate those rulings into actionable insights for plan advisors.

Speaking engagement: Pensions & Investments 2026 Defined Contribution East Coast Conference (March 15 – 17, 2026)

Jamie Fleckner spoke on the session “Dodging DC Legal Landmines.”

Audio Insight: “Fitting Private Markets Into 401(k) Plans” (February 10, 2026)

In an interview, Jeremy I. Senderowicz discussed the White House directive on alternative assets and the addition of illiquid investments to retirement accounts built for daily trading.

Goodwin named a Law360 Practice Group of the Year for Benefits.