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Daniel Aronowitz, the current head of the Department of Labor’s Employee Benefits Security Administration (EBSA), has been a vocal critic of “excessive fee and imprudent investment lawsuits against plan sponsors that followed best fiduciary practices.” In his view, these lawsuits “have become a lucrative way for a small group of plaintiffs’ firms to monetize ERISA’s fiduciary provisions. The key problem is that many fiduciary breach cases are allowed to proceed into expensive discovery even when the plans follow fiduciary best practices.”
And DOL has, during his tenure, sided with defendant fiduciaries in a number of fiduciary lawsuits.
On October 1, 2026, Democrats on House Education and Workforce Committee, including that committee’s ranking member, Bobby Scott (D-VA), took the other side of this issue, introducing three separate bills that would effectively overrule court decisions that have limited the sorts of cases participant plaintiffs can bring against ERISA fiduciaries.
In this article, we very briefly summarize these new proposals and conclude with discussion of their prospects and implications.
No more deference to plan committee’s benefit determinations/plan interpretations: The Employee and Retiree Access to Justice Act would end courts’ current practice of deferring to plan fiduciaries’ decisions “with respect to benefit determinations or interpretation of plan language” (see, e.g., In Re: Quest Diagnostics Erisa Litigation), requiring instead full (de novo) review by the court, with no deference to the fiduciary’s decision. The bill would also, generally, limit the ability of plans to impose arbitration provisions with respect to participant ERISA lawsuits.
Expansion of fiduciary lawsuits against defined benefit plans. The Protecting Workers’ Benefits Act would give a plan participant the right to “sue on behalf of the plan,” and in connection with such a lawsuit it would give the participant “an equitable interest in the disposition of plan assets,” including a litigation incentive (for the litigating participant) of 0.5%-1.0% of the amount recovered. This addition to ERISA’s remedy provisions is apparently designed to overturn the Supreme Court’s holding in Thole v. U.S. Bank. The Court in Thole held that DB participants “possess no equitable or property interest in the plan,” and where they are still being paid their benefits, they have no standing to bring a lawsuit. This bill is apparently intended to give them an “equitable or property interest” that Thole says they do not thus creating such a right to sue, critically in pension risk transfer litigation (see, e.g., our article Risk transfer litigation: more conflicting court decisions).
Reversing court decisions striking down Biden DOL changes to the fiduciary advice rules. Earlier this year, a Texas district court put a formal end to the Biden DOL’s project re-writing the rules for fiduciary advice. The Workers’ Retirement Savings Protection Act of 2026 would, via legislation, re-implement many of the provisions that were part of that project, including getting rid of the five-part test and explicitly applying ERISA fiduciary rules to advice with respect to rollovers.
Nothing will happen until 2029 at the earliest. These bills are going nowhere in the current (119th) Congress. But if, as many believe likely, the Democrats take control of the House of Representatives in the upcoming mid-terms, it is likely that Representative Scott will become Chairman of the House Education and Workforce Committee, in the 120th Congress. And in that context these bills may at least go to the House floor (in some form). But whoever controls the next Congress, a Presidential veto will make the possibility of the final adoption of any of these bills remote.
So, while these issues are likely to remain on the Democrats’ agenda for some time, it will not be until 2029 – if the Democrats take back the White House – that there may be a possibility of actually turning one or more of these proposals into law.
No fix to the Cornell decision in the short term. But also, the clear pro-litigation nature of these proposals signals that there will be no bi-partisan fix to the problems for sponsors – and the possibility of a spike in litigation – resulting from the Supreme Court’s decision in Cunningham v. Cornell University. In Cunningham, the Court held that, to survive a motion to dismiss, a plaintiff bringing an ERISA prohibited transaction claim against plan fiduciaries need not plead that there was no available exemption with respect to it. That decision was unanimous, but the Court nevertheless recognized that the “serious concerns” raised by defendants that allowing these claims on a “barebones” pleading could lead to “meritless litigation … harm[ing] the administration of plans and forc[ing] plan fiduciaries and sponsors to bear most of the associated costs.”
There was, at one point, hope that bipartisan legislation narrowly addressing this issue might be adopted. With Democratic leadership support for these new, pro-participant lawsuit proposals, that now appears unlikely.
We will continue to follow this issue.
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This is a publication of O3 Plan Advisory Services. If you have any comments, or have questions about regulatory developments, please contact your relationship manager or Mike Barry at mbarry@octoberthree.com.
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