Employee Benefits Lawyer James Beall Discusses ERISA Excessive Fee Litigation in Law360

Millions of workers rely on employer-sponsored defined contribution retirement plans to ensure a financially stable future, but these 401(k) and 403(b) plans sometimes contain hidden or excessive fees. The Employee Retirement Income Security Act (ERISA) requires that employers pay only necessary and reasonable fees for their plans, but the determination of what fees satisfy this standard is an ongoing question debated across a highly active litigation landscape.

Willig, Williams & Davidson partner James S. Beall recently authored an article for Law360 exploring current trends in ERISA excessive fee litigation. He notes that most of these cases turn on how plaintiffs plead their claims. Some courts permit cases with more general allegations of high costs to go forward, while others require side-by-side comparisons of what providers or investments a plan chose with what alternatives were available.

In April 2025, the U.S. Supreme Court clarified that the burden of proof rests with defendants to justify the necessity and reasonableness of fees, removing the pressure on plaintiffs to anticipate every defense a plan sponsor might offer for high costs. Another case in the U.S. District Court for the Southern District of New York highlights the harsh view courts and juries take of self-dealing; a retirement services company’s plan paid the company itself excessive fees, and a jury awarded the plaintiffs $38.8 million in damages.

Other cases indicate that factual specificity on the part of plaintiffs may be key in successfully pursuing litigation. The U.S. Supreme Court has agreed to hear a case involving a complaint that alleged a plan made imprudent investments in hedge funds and private equity. The courts below dismissed the case because they did not believe the plaintiffs alleged sufficient comparators or other facts as of the time the plan chose the hedge funds that, if true, would show imprudence. The Supreme Court is expected to clarify across the federal courts whether and/or how pleading “meaningful benchmarks” is required for an excessive fee case to survive a motion to dismiss.

As these cases continue to shape ERISA law, it is important to note that detailed facts can go a long way toward helping the case of plaintiffs and that conflicts of interest on the part of fiduciaries are taken seriously. Paying attention to new developments is essential in crafting effective litigation strategy.

Read the full article online: How Specificity, Self-Dealing Are Shaping ERISA Litigation (Subscription required.)