In this edition of the ERISA Edit, we address some important developments in the health and welfare and retirement spaces, including:

• Supreme Court allows post-measurement actuarial assumptions in withdrawal liability calculations
• Eighth Circuit affirms dismissal of 401(k) forfeiture suit for lack of Article III standing 
• Fifth Circuit vacates Aramark panel decision, to reconsider scope of equitable relief under ERISA § 502(a)(3)
• Supreme Court preemption ruling
• Department of Labor (DOL) Field Assistance Bulletin (FAB) signals more targeted Employee Benefits Security Administration (EBSA) enforcement approach
• Voluntary benefits litigation continues to expand
• Proposed rule would establish fertility benefits as a new category of excepted benefits

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Supreme Court Addresses Calculation of Actuarial Assumptions in ERISA Withdrawal Liability

In M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 23-1209, the Supreme Court resolved a split between the Court of Appeals for the Second and DC Circuits by addressing the question concerning when actuarial assumptions must be selected in calculating withdrawal liability under ERISA (previously discussed here). 

The dispute arose under the statutory framework governing withdrawal liability in the Multiemployer Pension Plan Amendments Act (MPPAA), which requires employers withdrawing from multiemployer pension plans to pay their share of the plan's unfunded vested benefits. The question presented to the Court was whether ERISA's instruction to calculate withdrawal liability "as of the end of the plan year" requires plans to use actuarial assumptions adopted by that measurement date, or whether plans may instead use assumptions adopted afterward, so long as they are based on information available as of that date.

The petitioners – M & K Employee Solutions, LLC, Phillips Liquidating Trust, Ohio Magnetics, Inc., and Toyota Logistics, Inc. – were employers that withdrew from the IAM National Pension Fund in 2018. They challenged the Fund's use of a 6.50 percent discount rate adopted in January 2018, after the December 31, 2017, measurement date. The Fund had previously used a 7.50 percent rate for valuation purposes, which would have resulted in significantly lower withdrawal liability. The petitioners argued that the Fund's post-measurement-date revision improperly increased the plan's estimated underfunding and, in turn, their liability.

The dispute was initially resolved in arbitration in favor of the employers, but those awards were vacated by the District Court for the District of Columbia, a decision later affirmed by the DC Circuit, which held that ERISA does not impose a timing deadline for selecting actuarial assumptions. 

The Supreme Court affirmed the DC Circuit's decision, holding that ERISA does not require actuarial assumptions to be selected on or before the measurement date. The Court explained, based on the statutory text, that the statutory language in 29 U.S.C. § 1391's directive to calculate withdrawal liability based on plan assets and liabilities "as of" the measurement date identifies the relevant valuation point but does not prescribe when the underlying assumptions must be chosen. The Court rejected the petitioners' argument that this language imposes a cutoff, emphasizing that it fixes the point in time for measuring liability rather than regulating the timing of actuarial decision-making.

The Supreme Court then examined 29 U.S.C. § 1393, which governs actuarial assumptions, noting that it requires assumptions to be reasonable, to reflect the plan's experience and reasonable expectations, and to represent the actuary's "best estimate of anticipated experience under the plan." The Court noted that the statute contains no requirement regarding when those assumptions must be selected. The Court declined to read such a limitation into the statute, particularly where Congress imposed explicit timing constraints in other ERISA provisions but chose not to do so here.

The Court also concluded that the statute's "best estimate" requirement supports allowing actuaries to adopt assumptions after the measurement date. It further reasoned that a rule requiring assumptions to be fixed in advance would "prevent [actuaries] from relying on the most up-to-date data when selecting their assumptions." Permitting the use of updated information ensures that withdrawal liability calculations more accurately reflect a plan's financial condition.

The decision provides clarity for employers and plan sponsors by confirming that ERISA does not require withdrawal liability calculations to rely on assumptions adopted by the measurement date. Instead, actuaries may adopt assumptions afterward, provided they satisfy the statute's standards of reasonableness and reflect the actuary's best estimate. 

Eighth Circuit Affirms Dismissal of Forfeiture Suit for Lack of Standing

On May 12, 2026, the Court of Appeals for the Eighth Circuit affirmed the dismissal of a putative class action lawsuit in Matula v. Wells Fargo & Company, No. 25-2441 (8th Cir.), which challenged the use of forfeited 401(k) plan funds, holding that the plaintiff failed to establish Article III standing. 

A participant in the Wells Fargo 401(k) plan filed the lawsuit against Wells Fargo and its benefits committees (collectively, Wells Fargo), alleging that Wells Fargo's use of forfeited plan funds violated ERISA's fiduciary-duty and prohibited-transaction provisions. Specifically, the plaintiff alleged that Wells Fargo improperly used forfeited funds to offset its employer matching contributions, rather than to pay plan expenses or make corrective allocations to participant accounts.

Under the terms of the plan, Wells Fargo retained "sole discretion" to apply forfeited funds in one of three ways: (1) offsetting employer contributions, (2) paying plan expenses, or (3) making corrective adjustments to participant accounts. Wells Fargo elected to use forfeitures to reduce its contribution obligations.

Wells Fargo moved to dismiss the complaint for failure to state a claim and lack of subject matter jurisdiction, arguing that the plaintiff failed to allege an "injury in fact," as required for Article III standing, because the use of forfeited funds had no impact on the plaintiff's individual plan account. The district court agreed and dismissed the case with prejudice, rejecting the plaintiff's assertion that plan terms required forfeitures to be used in a manner that would directly benefit participants. 

On appeal, the Eighth Circuit affirmed the dismissal but clarified certain aspects of the district court's reasoning. While the appellate court agreed that the district court should have evaluated standing based on the allegations in the complaint rather than interpreting the plan terms, it nonetheless concluded that dismissal was appropriate. Notably, at oral argument, the plaintiff conceded that the complaint did not allege any actual injury to the plaintiff's individual account resulting from Wells Fargo's use of forfeited funds. Even accepting the plaintiff's interpretation of the plan – that forfeitures could have been used to pay expenses or make allocations benefiting participants – the Eighth Circuit held that the complaint still failed to allege a concrete injury, and therefore the plaintiff lacked Article III standing.

Importantly, however, the Eighth Circuit remanded the case with instructions to enter dismissal without prejudice, noting that dismissal for lack of subject matter jurisdiction generally must be without prejudice. 

The decision in the case is another example of the formidable hurdle standing poses in participant-instituted litigation challenging fiduciary and plan-sponsor activity associated with the administration and funding of ERISA plans. Standing has become a fertile area for dismissal in ERISA lawsuits especially since the Supreme Court's decision in Thole v. U.S. Bank N.A., 509 U.S. 538 (2020), which mandated careful analysis of the purported injury the plaintiffs allege they have suffered or will suffer as a result of the actions at issue in the complaint.

Fifth Circuit Grants En Banc Rehearing in Aramark, Vacates Panel Decision on ERISA Surcharge Relief

On April 28, 2026, the Court of Appeals for the Fifth Circuit granted Aetna Life Insurance Company's petition for rehearing en banc in Aramark Servs., Inc. v. Aetna Life Ins. Co., No. 24-40323 (5th Cir.), and vacated the panel opinion issued on December 18, 2025 (previously discussed here). The order provides that the case will be reheard by the full court, with oral argument to be scheduled.

The now-vacated panel opinion affirmed the district court's determination that Aramark's claims sought equitable relief and therefore were not subject to arbitration under the terms of an arbitration provision in a contract between the parties. Central to that holding was the panel's conclusion that Aramark's request for make-whole monetary relief against Aetna could qualify as "equitable relief" under ERISA § 502(a)(3), relying on the equitable surcharge doctrine derived from CIGNA Corp. v. Amara, 563 U.S. 421 (2011). The panel reasoned that such relief – although monetary in form – may be characterized as equitable when sought against a fiduciary for breach of fiduciary duty.

The en banc proceedings will squarely address whether compensatory, make-whole relief untethered to specifically identifiable funds can properly be classified as "equitable" under § 502(a)(3). The Fifth Circuit's decision to vacate the panel opinion is significant because it removes what had been the only recent circuit-level decision recognizing surcharge as an available remedy in this context. That position stood in contrast to the Fourth and Sixth Circuits' decisions in Rose v. PSA Airlines, Inc., 80 F.4th 488 (4th Cir. 2023), and Aldridge v. Regions Bank, 144 F.4th 828 (6th Cir. 2025), which rejected surcharge under § 502(a)(3) and concluded that ERISA's provision for "appropriate equitable relief" in § 502(a)(3) does not extend to compensatory monetary damages absent traceable funds under a constructive-trust theory.

Supreme Court Issues Preemption Ruling with Potential ERISA Implications

On May 14, 2026, the Supreme Court issued its decision in Montgomery v. Caribe Transport II, LLC, No. 24-128. In a brisk eight-page decision, the Court construed a savings clause attached to the preemption provision in the Federal Aviation Administration Authorization Act as allowing for state-law negligence claims against an entity who hired another to transport goods, when the latter allegedly caused severe injuries to the plaintiff in a trucking accident. The savings clause authorized states to regulate safety "with respect to motor vehicles."

In construing the language "with respect to" in the savings clause, the Court turned to dictionaries and gave it essentially a literal construction, saying that it means "concern[s]." The Court then held simply, and quickly, that "[r]equiring [the defendant] to exercise ordinary care in selecting a carrier therefore 'concerns' motor vehicles—most obviously, the trucks that will transport the goods." So, the state tort claim fell under the savings clause's language, the Court determined.

Concurring, Justice Brett Kavanaugh recognized that the decision likely has implications for other statutes with preemption provisions centered on language like "with respect to." He expressly cited ERISA's "relate to" preemption language as analogous to the statutory language the Court here gave very broad, literal construction. Since the Supreme Court's Travelers decision in the mid-1990s, when the Court criticized literal construction of ERISA's preemption provision and invited additional focus on statutory purposes and supposed presumptions against preemption, there has been some tension in the Court's ERISA-preemption jurisprudence and its ever-increasing instruction in almost all settings that the statutory text matters first and foremost. And by the mid-2010s, the Court formally recanted on a presumption against preemption. No doubt, decisions like Montgomery will, and should, provide further impetus for broad-based preemption rulings under ERISA, much as Congress, through its exact statutory terms, instructed. 

DOL Field Assistance Bulletin Signals Shift in Enforcement Priorities 

On April 14, 2026, the DOL issued Field Assistance Bulletin 2026-01 (FAB), outlining EBSA's enforcement priorities and guiding principles. The FAB emphasizes a recalibration of EBSA's approach, responding to longstanding industry concerns by prioritizing fairness, transparency, and efficiency in ERISA enforcement. The four priorities the FAB addresses are (1) focused enforcement, (2) avoiding regulation by enforcement, (3) senior-level review of critical enforcement actions, and (4) ensuring timely and responsive investigations.
 
These priorities address several areas that have drawn criticism under prior administrations and signal a more disciplined enforcement posture, particularly in civil investigations. EBSA will now prioritize cases involving bad-faith conduct, including breaches of the duty of loyalty, misappropriation of plan assets, and improper administration of plan benefits. While breaches of the duty of prudence remain relevant, the FAB emphasizes that enforcement actions should not serve to second-guess fiduciary decision-making processes where there is no evidence of disloyalty or conflicts of interest.

Consistent with its stated goal of avoiding regulation by enforcement, EBSA emphasizes that new interpretations of ERISA should be communicated through formal guidance, not introduced for the first time in enforcement actions. This shift is intended to provide greater predictability for plan sponsors and fiduciaries.

The FAB further introduces enhanced internal oversight by requiring that senior EBSA leadership be informed of significant enforcement activity, including proposed settlements and voluntary corrective actions. This requirement is designed to promote consistency across regions and to ensure that major enforcement decisions align with agency priorities. In addition, EBSA addresses longstanding concerns regarding protracted investigations by committing to defined timeframes – generally 18 months for routine matters and 30 months for more complex investigations – absent exigent circumstances, and requiring quarterly reviews for extended cases. 

Finally, the FAB states that EBSA will avoid coordinating with private plaintiffs' attorneys, an issue currently under review by the DOL's Inspector General. Taken together, these changes reflect a broader effort by EBSA to restore confidence in its enforcement program by emphasizing fairness, transparency, and efficient resolution of investigations while prioritizing cases involving significant harm to plan participants and beneficiaries.

Updates Regarding New Voluntary Benefits Cases

At the end of 2025, a new type of ERISA health and welfare plan class action emerged involving voluntary benefits, previously reported on here. These cases allege breaches of fiduciary duty, prohibited transactions, and knowing participant claims under ERISA against both employers/plan sponsors and their service providers. 

Here are some updates: 

• One of these four cases, Braham, et al. v. Laboratory Corp. of America Holdings, et al., No. 26-cv-00455 (M.D.N.C. Dec. 23, 2025), was transferred to a new venue, and there are no responsive pleadings to date. 
• Amended complaints have been filed in Brewer, et al. v. CHS/Community Health Systems, Inc., et al., No. 25-cv-15578 (N.D. Ill. Apr. 17, 2026), Pimm, et al. v. United Airlines, Inc., et al., No. 25-cv-15581 (N.D. Ill. Apr. 20, 2026), and Fellows v. Universal Services of America, LP d/b/a Allied Universal, No. 25-cv-10659 (S.D.N.Y. Mar. 30, 2026). 
• Defendants have filed motions to dismiss the first amended complaints in Brewer, Pimm, and Fellows. These motions are currently being briefed and will be decided by the respective courts. 

The employer defendants in these cases generally challenge the plaintiffs' fiduciary-breach claims on several grounds, including that the choice to sponsor voluntary benefits is a settlor rather than a fiduciary function, lack of standing, and that there is no imprudent fiduciary process. As to the prohibited-transaction claims, that the employers/plans engaged in prohibited transactions with their service providers by causing plan assets to be transferred as excessive payments for premiums and commissions, the employer defendants in these cases generally argue that neither the employer nor the broker acted as a fiduciary with regard to participant premiums or broker commissions, but rather that this is either a settlor function or ministerial conduct. They further contend that: premiums are paid by the plans to the insurer, rather than brokers/service providers; that even if the premiums are plan assets before being remitted to the insurer, they cease to be plan assets once transferred to the insurer; and that the commissions were paid by the insurer and that the amount of such commissions was reasonable.

Consistent with the arguments advanced by the employer defendants, the broker defendants in these cases generally argue that the plaintiffs' claims for breach of fiduciary duty, prohibited transactions, and knowing participation in a prohibited transaction fail for lack of standing, that the premiums are not excessive, and that the broker/service provider is not an ERISA fiduciary. Of note, the insurance broker defendant in Brewer cites the recent pharmacy benefit manager (PBM) fee cases, including Navarro v. Wells Fargo and Stern v. JPMorgan, to argue that the allegations fail for lack of standing because of the lack of connection between the excessive fees and the plaintiffs' out-of-pocket outlays, in the form of premiums. 

Also of note, the amended complaints in these cases appear to address the threshold issue of whether the plaintiffs adequately allege that voluntary benefits are ERISA-covered in the first instance. In these amended complaints, the plaintiffs allege that the voluntary benefits are covered by ERISA by pointing to Form 5500s filed by defendants as well as plan documents, including summary plan descriptions, which describe and include the voluntary benefits insurance at issue in the case. The plaintiffs also allege that the defendants have endorsed the voluntary benefits. The defendants have not, to date, disputed ERISA coverage in their responsive motions.  

Recent history suggests that these voluntary benefits cases are not going away. On May 4, 2026, the plaintiffs' firm responsible for the first four cases in this area filed another complaint, this time in the District of Arizona, Haller, et al. v. Banner Health, et al., No. 26-cv-3114. Banner Health was also sued in April 2026 by a different plaintiffs' firm on behalf of another putative class of participants and beneficiaries in the same health and welfare plan regarding their voluntary benefits. See Hannum, et al. v. Banner Health, et al., No. 26-cv-02944 (D. Ariz. Apr. 28, 2026). These cases are nascent and the defendants have not yet filed responsive pleadings. We will continue to closely watch this emerging area. 

New Proposed Rule on Voluntary Fertility Benefits

On May 13, 2026, the DOL and the Department of Health and Human Services (HHS) published a proposed rule, "Excepted Fertility Benefits," to establish certain fertility benefits as a new category of excepted benefits, by amending regulations implementing ERISA, the Internal Revenue Code, and the Public Health Service Act (PHSA). This development is significant because excepted benefits are generally exempt from certain requirements under the Health Insurance Portability and Accountability Act (HIPAA), the Patient Protection and Affordable Care Act (ACA), and the No Surprises Act (NSA), including requirements applicable to group health plans and group and individual health insurance coverage. The proposed rule states that the excepted fertility benefits must meet the following criteria: 

• Substantially all of the benefits must be for the diagnosis, mitigation, or treatment of infertility or related reproductive health conditions. 
• Benefits are capped at a combined lifetime maximum of up to $120,000 for participants and their beneficiaries, indexed for inflation for plan years starting after 2028. 
• Employers must provide a notice that clearly describes the coverage and meets other specified requirements. 

The proposed rule cites Executive Order 14216, "Expanding Access to In Vitro Fertilization," and reports that in vitro fertilization (IVF) coverage is not offered in the majority of employer-sponsored group health plans as part of their major medical coverage. Further, the proposed rule notes that while insured plans may be required to cover fertility benefits as an essential health benefit or by applicable state law, these requirements do not apply generally to self-insured group health plans. 

This proposed rule adds to federal policy in this area to include the DOL, HHS, and the Department of the Treasury's (collectively, the Departments) October 16, 2025 "FAQs about Affordable Care Act Implementation Part 72," pertaining to supplemental fertility benefits, which we wrote about here. The FAQs clarified the existing categories of excepted benefits that employers can use to offer fertility benefits, including independent, non-coordinated excepted benefits and limited excepted benefits, and foreshadowed the May 2026 proposed rule by indicating that the Departments would provide additional ways to access fertility benefits as a limited excepted benefit. The FAQs also stated that the Departments are "also considering whether to modify the standards under which supplemental health insurance coverage provided by a group health plan, including a supplemental benefit for fertility coverage, will be considered to satisfy the conditions for being an excepted benefit, such as whether the current limitation-on-value safe harbor of 15 percent that was set forth in guidance should be increased." Comments on the proposed rule are due by July 13, 2026. 

In the News

DeMario was quoted in PLANADVISER regarding a recent U.S. Fourth Circuit Court of Appeals decision holding that a long-term incentive program used by Merrill Lynch does not qualify as a retirement plan under ERISA.

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