This is a really educational week on Five Favorites for Friday. There is no hidden message or implicit critique buried in that point. It’s just that a number of comprehensive stories providing a detailed overview of key areas of development in ERISA litigation were published this past week and, solely because of their quality, make up a disproportionate number of the articles that made it into the Five Favorites for Friday post this week.

As you know, the Five Favorites for Friday post is a recurring weekly feature on my blog. So if you prefer the ones that are less informative but more filled with my snark and opinion, just wait a week – I am sure I will be back to that on this weekly post before you know it!

  1. In the ERISA world, forfeitures are all the rage. They are showing up in my own practice and every time I open up the (digital) newspaper there is a story of a new forfeiture class action. What is a forfeiture in this context, what is the fate of the class actions being filed over them and is this a promising area of recovery for the class action plaintiffs’ bar (and thus a legitimate concern and risk for plan sponsors and their insurers)? No one really knows, because it is too early to tell, but to date, the early returns have favored the defendants. Everything you need to know about the short history of this line of litigation and the current treatment of this theory by the courts is discussed in this excellent publication on the status of forfeiture litigation.
  2. An interesting aspect of forfeiture litigation under ERISA has been that defendants have done pretty well to date at the motion to dismiss stage and, partly as a result, the defense bar is downplaying the risk posed by these types of claims. Cautionary note for you – the same was basically true at the outset of the excessive fee class action filings 15 or so years ago. So don’t let the emerging consensus that forfeiture class actions lack legs make you think the issues raised by this type of litigation are dead and gone already. All you have to read to know they are not is this article on the $42 million settlement of a forfeiture class action that was just penned. (Note that the story may be behind a paywall but if you don’t have access, the story reports that “Providence Health & Services signed a class settlement valued at more than $42 million, resolving claims it mismanaged its employees’ retirement plan by failing to use money forfeited by departing workers to reduce administrative expenses.”)
  3. The hottest topic in the world of 401(k) plans is whether and if so how to add private equity and other so-called alternative assets to 401(k) plans. The lawyer who invented excessive fee class action litigation, Jerry Schlichter, has a lot to say on the subject in this article. Come for the great personal details about his background, stay for the relatively evenhanded presentation of the substantive issues related to the push to open plans up to those investments.
  4. I stood up in a Philadelphia courtroom in 2014 to argue post-trial motions after a weeklong jury trial. What has long stuck with me is that every other case heard that day had its original origin, just as mine did, in the fallout from the economic collapse and near complete shutdown of the commercial economy in 2008. That day in court, though, was six years after the events at issue. I have always thought of it as a good reminder of how long a tail major economic or mass tort events have, as claims arising from them work their way through the system. I was reminded of that by this article, explaining that pandemic era disputes involving business interruption coverage are still working their way through the court system (the article is about the UK, but I have little doubt it’s the same on this side of the Atlantic as well).
  5. Many years ago, when target date funds were being rolled out into 401(k) plans, there was vigorous debate at ERISA litigation conferences as to whether including them as investment options was a fiduciary breach or could at least give rise to such claims. The consensus at that time was that, at a minimum, plan sponsors and fiduciaries needed to look closely at the underlying investments and issues related to the glide paths. Over time, these concerns died away and their inclusion in plans became an accepted part of the lay of the land. However, this article argues that this complacency is now a real threat to plan participants and the fiduciaries charged with protecting them.