While 401(k) plans remain the primary target of ERISA fiduciary litigation, health plans and voluntary benefits programs are facing growing legal scrutiny, according to a new report from Encore Fiduciary. In 2025, plaintiffs' law firms filed 155 class actions alleging fiduciary breaches, approaching near-record levels and continuing the frenetic pace seen in recent years, Encore said.
Historically, litigation focused on excessive fees and imprudent investments in retirement plans. Now, health plan litigation is expanding. One common target is tobacco premium surcharges, where plans charge higher premiums to participants who use tobacco. While these surcharges aim to offset higher expected health costs, lawsuits allege they may violate ERISA fiduciary standards if improperly disclosed, inconsistently applied or inadequately monitored, Encore said.
Another emerging area is "ghost network" claims. These lawsuits allege plan sponsors failed to adequately oversee provider networks, leaving participants with inaccurate directories or restricted access to promised care. Encore notes these claims reflect the growing complexity of fiduciary oversight in health plans, especially with third-party administrators and narrow networks.
Excessive fee allegations targeting prescription drug costs have been expected to become a new wave of ERISA litigation. Two cases filed in 2024 are still moving through the courts, and one new prescription drug lawsuit was filed in 2025, using slightly different allegations to secure standing. Encore notes that if a legal roadmap emerges to establish standing, additional lawsuits could follow. Meanwhile, some plan sponsors have proactively sued pharmacy benefits managers (PBMs) over transparency and pricing, and regulatory scrutiny has likely slowed this emerging legal theory.
Voluntary benefits programs are also coming under scrutiny. Lawsuits increasingly target consultant compensation, plan design and compliance with ERISA safe harbors, signaling that even plans traditionally considered low risk are attracting litigation, Encore reported.
While health and voluntary benefits are attracting growing attention, 401(k) plans remain the most frequently targeted ERISA plans. Encore Fiduciary notes that recent lawsuits continue to center on recordkeeping fees, stable value funds and the use of forfeitures, even as plan costs have generally declined. Litigation strategy and potential settlements often drive claims more than actual financial harm to participants.
Settlements remain significant but individual participants typically receive modest payouts, the report found. Excessive fee and imprudent investment cases in 2025 averaged just over $3 million, while tobacco surcharge claims averaged nearly $5 million. Participants generally received $55–$70 per person, with plaintiffs' attorneys taking roughly one-third. Over the past five years, total settlements across ERISA cases have exceeded $1.3 billion.
Despite high filing volumes, Encore notes most ERISA lawsuits do not make it to trial or result in major participant recoveries. Many are dismissed early or resolved through motions to dismiss, summary judgment or settlements favoring defendants, and many never achieve class certification.
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