Reforming ERISA Lawsuits to Put Participants First

Trades Litigation Proposal

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Chantel Sheaks
Vice President, Retirement Policy, U.S. Chamber of Commerce

Published

April 17, 2026

Over the past decade, ERISA class‑action litigation has surged with lawsuits challenging retirement plan fees, investment menus, and routine plan operations. While ERISA was designed to protect workers’ benefits and provide a meaningful avenue to redress fiduciary breaches, today’s litigation environment often falls short of that goal. Instead, many cases are lawyer-driven cases aimed at settlement rather than reform, indicated by many copy‑and‑paste complaints and questionable theories of liability.

Our policy proposal, ERISA Lawsuits Should Benefit Participants, Not the Plaintiffs’ Bar, examines how excessive and often meritless litigation is straining the retirement system. It documents the rapid growth of ERISA fee cases, mounting settlement pressure faced by plan sponsors, and the reality that participants frequently recover only nominal amounts after attorneys’ fees and costs are deducted. This dynamic discourages employers, especially small and mid‑sized organizations, from offering retirement plans at all, directly undermining ERISA’s core purpose.

The proposals are a series of targeted legislative reforms designed to restore balance while preserving strong protections for workers:

Higher pleading standards to ensure claims plausibly allege conduct no reasonable fiduciary could have undertaken
Clear limits on fiduciary liability so plan decisions are judged based on prudent process, not hindsight
Automatic discovery stays while motions to dismiss are pending, minimizing coercive litigation costs
Clarification of prohibited transaction rules in response to recent Supreme Court precedent, reducing abuse of technical allegations
Allocation of loss‑causation burdens to plaintiffs, aligning ERISA with traditional principles of civil liability
Direction to the Department of Labor to address and deter frivolous class‑action litigation

Together, these proposals aim to refocus ERISA enforcement on its original mission: protecting retirement savings and ensuring promised benefits are delivered—without encouraging lawsuits designed primarily to extract settlements.

This blog post provides a high‑level overview of the issues and solutions under consideration. For a detailed analysis, including proposed statutory language and supporting authorities, we encourage you to download and review the full policy document available on this page.