Ongoing litigation is threatening employee retirement benefit plans, theoretically impacting upwards of 155 million people who currently subscribe to those plans.
So remarked several witnesses appearing before a subcommittee of the House Committee on Education and Workforce.
In introductory remarks, Georgia Republican Congressman Rick Allen mentioned the need to “protect the retirement savings of Americans workers, and the employers who voluntarily maintain retirement saving employee benefits plans, from baseless predatory class action lawsuits.”
Such plans represent a collective pool of more than $14 trillion in funding, and for that reason have been the target of litigation, testimony before the committee revealed.
Legal action specific to the Employee Retirement Income Security Act, otherwise known as ERISA, have been steadily increasing for at least 15 years, remarked Glenn Butash, chairman of the Washington-based Eric Legal Center.
“Too often the cases we are seeing are expensive fishing expeditions by lawyers seeking settlements from deep-pocketed corporate plan sponsors,” said Butash.
“Their timing, approach, and grounds follow a formulaic playbook,” continued Butash, noting that “plan sponsors are forced to divert time to fight suits that is better spent hiring workers and improving benefits.”
Lynn Dudley, senior vice-president of the American Benefits Council, reported that some 89% of plan sponsor members in a recent survey said the “risk of litigation is a significant factor in their decision to offer services and investment options to their participants.”
Continued Dudley: “The risk of litigation is impacting plan sponsors and their decision and ability to offer a wider range of services and benefits to their participants, and that hurts participants, that hurts everybody.”
A proposed bill, the ERISA Litigation Reform Act, is designed to curtail what are called “meritless lawsuits.”
California Democrat Representative Mark DeSaulnier said that he thought the instance of class action suits under ERISA has been rare “relative to the number of retirement plans.”
DeSaulnier instead said the real issue of importance is a chronic underfunding of the Employee Benefits Security Administration. “No one wants frivolous lawsuits,” he remarked. “But if we follow the regulations and fund the investigators and the enforcement arm, we wouldn’t have to deal with the lawsuits.”
The ERISA Litigation Reform Act is currently being reviewed by the Education and Workforce Committee. If approved there, it will be sent to the full House.
December 5, 2025
By Garry Boulard
Photo courtesy of Pixabay
