Several recent court filings and press releases from the Department of Labor (DOL) demonstrate Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA) Daniel Aronowitz’ goals of providing regulatory clarity for the employee benefit system and restoring discretion to ERISA fiduciaries. These are informal methods for DOL to share its views regarding ERISA’s goals of efficiency, predictability and encouragement of employer-sponsored retirement plans, along with consistent application of ERISA principles in the benefits space. This post dives into DOL’s support for retirement plan sponsors in breach of fiduciary duty and excessive fee cases, new developments in group health plan and voluntary benefits litigation, as well as EBSA enforcement priorities.

Retirement Plan Fees and Fiduciary Duty to Monitor Investment Options

DOL issued a press release stating it welcomes the decision by the plaintiffs in Pizarro v. Home Depot to withdraw their U.S. Supreme Court petition after DOL urged the court to reject the plaintiffs’ expansive reading of ERISA. “This outcome should provide reassurance to the regulated community that the Department of Labor is committed to ending regulation by litigation and to defending ERISA as Congress intended,” said Aronowitz.

“The department made the facts clear: ERISA does not impose a special burden-shifting framework requiring defendants to disprove loss causation. Consistent with Supreme Court precedent, plaintiffs bear the burden of proving the essential elements of their claims, including loss causation,” said Solicitor of Labor Jonathan Berry.

Retirement Plan Forfeiture Allocation

In the case of Wright v. Honeywell, DOL issued a press release announcing he department’s amicus brief (friend of the court) filing that explained the Secretary of Labor’s view that there is no per se rule barring ERISA fiduciaries from deciding to allocate forfeited employer contributions to reduce future employer contributions rather than using those funds to offset administrative costs. 

In the amicus brief, the department argues that the district court correctly held that the plan sponsor did not breach its fiduciary duties of prudence and loyalty because the plaintiff’s argument only included a bare allegation that forfeitures were not allocated to pay plan expenses, even though the plan at issue provided for fiduciary discretion over that decision. Instead, the brief explains how a prudent and loyal fiduciary might have concluded that it was important to ensure that plan participants received the contributions expressly promised by the plan in a timely manner. 

“This filing is part of an ongoing effort by the Department to stop regulation by opportunistic litigation. The Department previously advanced the same legal analysis in Wright v. JPMorgan Chase & Co. and Hutchins v. HP Inc., cases involving materially similar fact patterns in which the district courts likewise dismissed the claims,” Solicitor Berry said.

Retirement Plan Investment Underperformance

During the 2026-2027 U.S. Supreme Court term, the justices agreed to take a case, Anderson v. Intel, to decide whether a plaintiff’s breach of fiduciary duty for investment underperformance requires alleging a meaningful benchmark. DOL presented its stance in an amicus brief in a similar case, Johnson v. Parker-Hannifin, that to plead an imprudent-investment claim, plaintiffs must use a meaningful benchmark, not just any fund that happened to outperform. Attorneys at Winston & Strawn wrote DOL’s brief stated that cherry-picking a higher-returning comparator is not enough to defeat a motion to dismiss. The DOL’s position is that careful, context-sensitive scrutiny of a complaint’s allegations is required in ERISA cases.

Until Regulatory Guidance Is Released, Amicus Briefs Have Significance

A former DOL official told Bloomberg Law News that filing amicus briefs (and publicizing them with press releases) are one way the department is carrying out that agenda of ending regulation by litigation. “This is one of the tools they do have within their control to try and weigh in, and even if a court isn’t required to agree with the agency or defer to the agency, it’s at least the agency explaining to the court during this administration that this is our position,” said Lisa Gomez, former assistant secretary of EBSA.

“When the DOL files a brief supporting the employer, it tells plaintiffs’ lawyers that the government will not be a silent partner. That can chill marginal cases and make sponsors’ settlement leverage more realistic,” the Winston & Strawn article said. In addition, courts tend to give weight to the DOL’s views on technical ERISA questions. The briefs act as a preview of future DOL regulations. “If the government is already arguing that certain claims are too speculative, the final fiduciary-advice and alternative-investment rules will likely embed similar protections,” Winston & Strawn concluded.

Health Plans and Fiduciary Duty to Negotiate Rx Prices

Recent health plan litigation that transferred the retirement plan excessive fee concepts to health plans have been dismissed, although appeals could proceed. A case alleging breach of ERISA fiduciary duties for failure to negotiate lower prescription drug pricing against Johnson & Johnson has been dismissed twice. In Lewandowski v. Johnson and Johnson, the judge ruled employees couldn’t demonstrate damages in the form of higher premiums because they couldn’t tie generic prices directly to premiums.

The Johnson and Johnson decision (District of New Jersey) relied on precedent from the cases Navarro v. Wells Fargo (District of Minnesota) and Knudsen v. MetLife Group (Third Circuit). The Wells Fargo and MetLife decisions found that the connection between employee contributions (premiums and out-of-pocket costs) and the plan’s fees for pharmacy benefit manager services was too tenuous. The court emphasized the plan sponsor’s discretion in setting participant contributions, which it stated can be influenced by multiple factors unrelated to amounts paid in connection with the prescription drug benefits. Quoting Navarro, the New Jersey court concluded, “There are simply too many variables in how Plan participants’ contribution rates are calculated to make the inferential leap necessary to elevate Plaintiffs’ allegations from merely speculative to plausible,” according to a Miller & Chevalier summary.

With ERISA group health plans, many factors determine the employee share of premiums. This is not the case with supplemental or voluntary benefits, where the premiums are fully paid by employees. Voluntary benefits are a new target in excessive fee litigation, bringing renewed attention to the level of employer involvement in these benefits.

Voluntary Benefits Legal Challenges

Voluntary benefit coverage, such as hospital indemnity, accident or critical illness, has 100% employee-paid premiums. Voluntary plans can be exempt from ERISA if the employer has limited involvement that meets voluntary plan safe harbor criteria.

What Is the Voluntary Plan Safe Harbor?

The conditions to meet DOL’s voluntary safe harbor ERISA exemption are no employer contributions, completely voluntary participation, no endorsement and no compensation to the employer from the insurance company. Newfront cautions, “Although employers frequently refer to all benefits paid entirely by the employee as ‘voluntary,’ employers must satisfy four conditions to meet the DOL’s voluntary plan safe harbor exemption from ERISA. The ‘no endorsement’ condition is particularly difficult to meet.” Read more about these conditions from Newfront and NFP. For analysis on activities that may cause endorsement and why it matters, read this Holland and Knight alert.

Lawsuits Alleging Breach of Fiduciary Duty

Multiple lawsuits have been filed alleging that voluntary benefit plans are ERISA plans that charge excessive premiums to employees in breach of fiduciary duty.

“The complaints are notable because they allege that these programs went beyond the safe harbor, and that once an employer assists in marketing the benefits, issues enrollment reminders to employees, or notifies the carrier of new employees, it is ‘endorsing’ the coverage, and the program is an ERISA welfare plan,” Nixon Peabody explains. They also allege that the “brokers themselves are functional fiduciaries under ERISA because they exercise discretion in recommending, implementing, and managing the voluntary benefit plans—and then violated their fiduciary duties by steering plans toward arrangements that allowed the brokers to pay themselves excessive commissions,” Groom Law Group wrote. 

For now, these cases have been filed-only, and we don’t know how the cases will proceed. Current considerations are to identify all voluntary coverages, determine if the coverage program relies on the voluntary plan safe harbor, verify that safe harbor conditions are met, and document the analysis or decision making.

Where the benefit is (or may be) an ERISA welfare plan, Nixon Peabody suggests conducting “an ERISA-compliance audit. Be sure plan documents, summary plan descriptions, and Form 5500s properly document and describe fiduciary roles and responsibilities. Review vendor contracts and fee disclosures to ensure provider compensation is reasonable.”

Looking back to 2025, EBSA enforcement obtained nonmonetary results including the elimination of illegal plan provisions, improved fiduciary governance and increased access to mental health benefits. For instance, EBSA investigated a claims administrator that was violating rules for out-of-network emergency services benefit determinations and mental health parity. As a result, the claims administrator established a trust fund to pay verified participants and providers.

EBSA Enforcement Results in 2025

Another nonmonetary result was improving missing participant procedures for nearly 50 plans in 2025. With that progress plus the launch of the retirement savings lost and found database, which makes it easier for terminated vested participants to receive payments owed to them, EBSA will decrease emphasis on missing participants in 2026.

EBSA Enforcement Priorities in 2026

EBSA issued a press release identifying where EBSA investigators will focus to have the greatest impact on protecting plan assets and participants’ benefits in 2026. The changes to the national enforcement projects are intended to increase broad-based employee benefit plan compliance, address abusive practices and bad actors, and deliver results that increase security for participants and beneficiaries, the release said. 

Investigators “focus on areas that we feel will produce the best results,” said Deputy Secretary of Labor Keith Sonderling. “By recalibrating the areas our investigators focus on, EBSA investigations will be more efficient, responsive, and prioritize serious misconduct rather than minor foot faults.”

In fiscal year 2026, EBSA investigators will prioritize cases related to: 

• Cybersecurity
  • Investigators review how plans and service providers protect their systems and data from cyber threats.
• Mental health and substance use disorder benefits
  • Investigators review how plans and service providers meet their legal obligations to provide these important benefits and remove barriers to accessing care, such as burdensome claims processes, unjustified treatment exclusions, inaccurate provider lists and unreasonable limits on care.
• Adequate provider networks
  • On February 10, DOL announced a settlement with Kaiser Foundation Health Plan Inc. to resolve allegations that Kaiser did not maintain adequate provider networks for mental health and substance use disorder care and used patient responses to questionnaires to improperly prevent patients from receiving care. As a result, members were unable to access in-network care and were forced to seek care outside Kaiser’s network, often at higher out-of-pocket costs. The settlement set up a claims process for covered members to seek reimbursement for certain out-of-network mental health and substance use disorder expenses.
• Protecting benefit distributions
  • Distressed plan sponsors: When plan sponsors face financial distress, including bankruptcy or receivership, it can result in missed contributions, unpaid claims and loss of health coverage for participants. EBSA investigators help prevent plan losses caused by asset diversion, unreasonable expenses and delayed collection of delinquent contributions. 
  • Custodial abandoned plans: EBSA investigators ensure that custodial service providers have proper procedures in place for identifying and handling plans that sponsors have abandoned. In cases where custodial service providers continue charging fees for services no longer performed or increase fees for abandoned plans, EBSA ensures that unreasonable or prohibited fees are refunded.
  • Abandoned plans: EBSA works to locate abandoned plans because of death, neglect, bankruptcy, incarceration or other circumstances and determines whether a fiduciary is still available to make necessary decisions, such as terminating the plan or distributing plan assets.
• Retirement asset management
  • Self-directed individual account plans: EBSA reviews whether fiduciaries follow a reasonable process when choosing and overseeing the plan’s investment lineup.
  • Underfunded defined benefit plans: EBSA wants to ensure plans do not pursue risky or unsuitable investment strategies as a way to improve funding status. EBSA examines systemic risks across the entire portfolio and reviews the procedures fiduciaries use to adopt and monitor the investment strategy.
  • Fiduciaries under ERISA 3(21) and 3(38): EBSA reviews the actions of 3(21) and 3(38) fiduciaries at a service provider level looking for conflicts of interest, including efforts to increase compensation or direct investments to affiliated funds.
• Surprise billing
  • EBSA reviews whether plans and issuers comply with No Surprises Act protections and requirements.
• Criminal abuse of contributory benefit plans
  • EBSA investigates misuse of employee contributions in contributory health plans that can result in unpaid health benefits or insurance premiums, leaving workers suddenly without medical coverage.
  • Employers, or others with authority over plan assets, may convert employee payroll contributions for their own personal use, or they may misapply employee contributions to cover business expenses.

Next Steps

DOL kicked off 2026 with a flurry of announcements and court filings that shared its views on fiduciary duty, participant protections and consistent application of ERISA principles. The International Foundation will keep you informed as rulemaking, litigation and enforcement activities continue.

Stay up-to-date on the latest updates with the International Foundation’s Presidential Administration and Employee Benefits toolkit.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.