4/30/25 Trends in ERISA Litigation: What Plan Sponsors Should Consider Now

April 30, 2025

By Jeff Robertson  &  Iris Tilley

We recently published five considerations for retirement plan fiduciaries in changing markets.  This E-Alert focuses on five trends in ERISA litigation that plan sponsors should consider in their risk mitigation efforts. 

1. Forfeiture Accounts

Regulatory agencies and plaintiff lawyers have increasingly focused on forfeiture balances in retirement plan accounts.  A retirement plan’s forfeiture balance must be allocated every December 31st (if it is a calendar year plan). Yet, many plans maintain forfeiture account balances beyond that date and “plan expense” accounts.  Additionally, many plan sponsors allocate those balances in the year following the year in which they were forfeited to offset plan expenses, raising questions of self-dealing.  It is critical to maintain a forfeiture policy in governing plan documents and present a plan of action to address forfeiture balances at the end of each plan year.

2. Health Plan Fee Litigation

Lawsuits are increasing for both tobacco surcharges and pharmacy benefit fees in group health plans.  We often find that plan sponsors, especially those sponsoring self-funded health plans or health trusts, do not consider the costs of a pharmacy benefit or a pharmacy benefit manager in written plan records. Additionally, many plan documents, including wrap documents, are not regularly reviewed by legal counsel.  It has been awhile since we saw the wave of cases and claims regarding weight loss drugs related to anti-smoking, but there may be a new wave of litigation on its way related to GLP-1 medications.   Procedures and documents remain critical in defending against any action which may relate to plan document claims.

 3. SECURE 3.0?

Partisan Washington DC lawmakers have been successful in one area – passing retirement plan legislation.  We expect to see further interest in automatic enrollment, mandatory employer retirement plan contributions, and lowering contribution age limits from 21 to 18.  It is also important to timely amend plan documents for the SECURE Act, the CARES Act, and the SECURE 2.0 Act.  For most plans, the amendment deadline is December 31, 2026, but collectively bargained and governmental plans have a longer runway.

 4. Health Plan Cost and Fee Transparency

While it can be at times difficult to follow the Trump Administration’s priorities, it is clear that a regulatory and legislative priority is to improve cost transparency at the health services level.  Most health plan sponsors do not have access to the information required to explain costs and services to their participants. Consider whether your health and welfare plan documents are understandable and updated.  Does your summary plan description or wrap document contain correct and updated disclosures?

 5. Health Plan Regulation

While the DOGE (Department of Government Efficiency) continues to make spending cuts to the federal government, it has not altered regulatory changes and disclosures related to HIPAA policies and procedures, telehealth, MHPAEA (Mental Health Parity and Addiction Equity Act), and a recent increase in 1094/1095 IRS penalty assessments.  

We are here to help. 

The Barran Liebman Employee Benefits Group assists employers with retirement and health plans.  Please contact Jeff Robertson at 503-276-2140 or jrobertson@barran.com, or Iris Tilley at 503-276-2155 or itilley@barran.com, or your regular attorney at Barran Liebman if you have any questions.