Congressional Testimony
Congressional Testimony
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Groom Law Group Principal Salek-Raham Testifies Before House Education & Workforce Subcommittee
WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following testimony by Andrew D. Salek-Raham, a principal at Groom Law Group, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement":* * *
Good morning, Chairman Allen, Ranking Member DeSaulnier, and members of the Subcommittee on Health, Employment, Labor, and Pensions ("Subcommittee").
My name is Andrew Salek-Raham. I am a Principal at Groom Law Group, Chartered ("Groom"), a law firm specializing in employee ... Show Full Article WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following testimony by Andrew D. Salek-Raham, a principal at Groom Law Group, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement": * * * Good morning, Chairman Allen, Ranking Member DeSaulnier, and members of the Subcommittee on Health, Employment, Labor, and Pensions ("Subcommittee"). My name is Andrew Salek-Raham. I am a Principal at Groom Law Group, Chartered ("Groom"), a law firm specializing in employeebenefits since it was founded 50 years ago by Theodore R. Groom, who was instrumental in developing ERISA's landmark fiduciary responsibility provisions and later the Multiemployer Pension Plan Amendments of 1980. I have represented plan sponsors, fiduciaries, and service providers in every major category of ERISA class action lawsuit and in U.S. Department of Labor investigations and enforcement actions for over a decade.
Thank you for the opportunity to testify today about a much-needed legislative coursecorrection to a plaintiff-friendly pleading standard. That standard has catalyzed an explosion of meritless ERISA class action lawsuits; enriched the class action plaintiffs' bar at the expense of American workers; and cost plan sponsors, fiduciaries, and service providers hundreds of millions of dollars in strike suit defense costs and settlement payments. In short, common-sense legislation is necessary to ensure that ERISA class action plaintiffs' lawyers are required to plead something, rather than nothing.
I. To take a step back, at the outset of every ERISA class action lawsuit, the plaintiff must file a complaint that satisfies his or her pleading burden: the complaint must allege facts making it plausible--not just possible--that the defendants violated ERISA, harming the plan and its participants. If the plaintiff does so and defeats the defendants' early-stage motion to dismiss, the plaintiff is entitled to harness the court's subpoena power to obtain "discovery"--written responses to questions, the production of confidential documents, and deposition testimony--from the defendants and from third parties.
Plaintiffs and defendants in ERISA class actions have asymmetric discovery obligations.
The named plaintiffs who purport to represent the class generally have relatively little information or knowledge about the subject matter of the lawsuit. On the other hand, defendants and third party witnesses--usually companies that sponsor ERISA-covered plans, plan fiduciaries, and plan service providers--typically have voluminous records and employ many witnesses with knowledge potentially relevant to the lawsuit.
These asymmetric obligations impose asymmetric costs. Once past the pleadings stage, the parties know that ERISA class action defendants are likely to spend upwards of seven figures just to reach summary judgment, which is defendants' first opportunity to argue the merits of their case. These astronomical costs create a strong incentive for defendants to agree to a cost-of-defense settlement to buy peace, regardless of whether plaintiffs' claims have any merit.
It is for this reason--to spare defendants from strike suits--that the Supreme Court has called the pleadings-stage motion to dismiss an "important mechanism for weeding out meritless [ERISA] claims."/i
Unfortunately, many district courts have elected not to apply this "important mechanism" such that motions to dismiss are often not effective at "separating the plausible sheep from the meritless goats."/ii
There are two main reasons meritless ERISA lawsuits slip past judicial gatekeepers.
First, plaintiffs' counsel often exploit ERISA's inherent complexity for their own advantage by obfuscating, rather than illuminating, the true nature of their claims. This commonly takes the form of a complaint containing several hundred paragraphs of dense factual allegations concerning investment theory; economic and market data; and complex, industry-specific terminology and concepts. Courts--drinking from a firehose as a general matter--are often understandably inclined to pass a case through to discovery rather than sift through the morass.
Second, courts have articulated a low bar for pleading prohibited transaction claims under ERISA section 406. In short, these courts have held that a plaintiff need only allege the bare elements of the transactions enumerated in section 406, and it is defendants who are responsible for pleading and proving the exemptions to those prohibited transaction found in ERISA section 408. The upshot is that some courts have held the most mundane, innocuous allegations--for example, "The plan paid a service provider for necessary services," or "An employee stock ownership plan purchased employer stock from the company's owner."--suffice to allege that a defendant violated ERISA. The Supreme Court in Cunningham v. Cornell University recently endorsed such an interpretation for section 406(a)(1)(C) claims related to fees for plan service providers./iii
II. Private plaintiffs' attorneys have taken advantage of the low pleading bar and high defense costs through trial to extract settlements in the millions of dollars--regardless of whether plan sponsors, fiduciaries, and service providers did anything wrong.
Plaintiffs' attorneys in the ERISA class action space fall into three main categories. The first is maximalist in their filings and minimalist in discovery: they file as many cookie-cutter complaints as possible but are generally uninterested in expending time and effort to conduct discovery or try a case. Instead, they rely on baseline costs of defense through trial and appeal-- again, typically in the millions--to extract an early cost-of-defense settlement.
The second type employs the opposite model--minimalist in their filings and maximalist in discovery. These firms seek to sue as many individuals as possible, no matter how attenuated they may be to the plaintiffs' claims. Defendants often include board members, members of management, plan service providers and advisors, and company shareholders--and even the spouses, children, and grandchildren of those individuals. Once they have maximized the number of potential defendants, the plaintiffs unleash a torrent of onerous discovery demands disproportionate to the needs of the case. Manufacturing complexity in this way significantly ups the costs of defense, increasing settlement pressure, while simultaneously inflating the plaintiffs' attorneys' potential fee award in the likely event of a settlement or unlikely event of a judgment.
The third category combines the worst elements of the first two: these plaintiffs' firms are maximalist in their filings and maximalist in discovery. They bulk-file copies of a stock complaint, pepper defendants with burdensome discovery not proportional to the needs of the case, and use those costs to leverage a settlement.
Examples abound. In one recent lawsuit, plaintiffs' counsel sued over a dozen defendants--including a defendant's infant grandchild. Plaintiffs there went so far as to send a process server to the infant's home--a wholly unnecessary step that only harassed the other defendants in an effort to increase settlement pressure. In another recent example, plaintiffs' counsel unnecessarily sued dozens of defendants, who were eventually represented by roughly a half dozen different law firms. This put enormous financial strain on the plan's sponsor--which was obligated to indemnify most of the defendants for their defense costs and settlement payments--during the multi-year pendency of the meritless lawsuit.
In an ideal world, class representatives--the individuals named as plaintiffs in a class action complaint--would take seriously their responsibility to engage competent class counsel, monitor their performance, and ensure that they act in class members' best interests. But ERISA class representatives generally provide no meaningful check on plaintiffs' counsel's behavior. The typical class representative is a former employee who responded to an (often misleading or incomplete) advertisement that plaintiffs' counsel posted to social media. They have little to no knowledge of, or involvement in, the lawsuit's claims or the manner in which their counsel is litigating them. Simply put, most class representatives have no idea what they are signing up for or why.
Many class representatives who might have understood what they signed up for initially do not follow through when the rubber hits the road. To give one example, one class representative quit simply because he did not want to drive a short distance to his deposition. Rather than dismiss the headless lawsuit, the court held it open while class counsel coaxed the named plaintiff back into the fold. He later appeared for his deposition in a limousine that his counsel provided to make sure he showed up.
Without any meaningful oversight from their clients, the ERISA plaintiffs' bar steers lawsuits toward settlements that line their own pockets with millions of dollars in fees but leave de minimis recoveries for the plan participants whose interests they purport to represent. I am aware of many examples in which class members received a per-person pittance, while plaintiffs' counsel walked away with a large percentage of a multi-million-dollar settlement.
III. One of Congress's central goals when it created ERISA's enforcement regime was to fairly balance providing participants with an avenue for pursuing meritorious claims while insulating plan sponsors and fiduciaries from frivolous ones. The ground-level pleading bar that has evolved in the courts has disrupted this balance, benefiting class action plaintiffs' lawyers and harming American workers and their employers.
Many district and appellate courts have recognized the harm that would result from allowing lawsuits to proceed based only on allegations that, for example, a 401(k) plan paid compensation to service providers, or an employee stock ownership plan ("ESOP") acquired employer stock for its participants. These courts sensibly required plaintiffs to plead something more--for example, that the routine transaction was actually intended to benefit a third party, that the compensation paid to the service provider was unreasonable, or that the ESOP purchased employer stock for more than fair market value. Others did not.
The Supreme Court in Cunningham v. Cornell University recently weighed in on this divide./iv
The Court shared the lower courts' concern about the consequences of a toothless pleading standard. It fretted that allowing cases to proceed based only on the fact that a routine transaction occurred would mean that "plaintiffs could too easily get past the motion-to-dismiss stage and subject defendants to costly and time-intensive discovery" for "meritless litigation," thereby "harm[ing] the administration of plans and forc[ing] plan fiduciaries and sponsors to bear most of the associated costs." Unfortunately, the Court's hands were tied: "These are serious concerns but they cannot overcome [ERISA's] statutory text and structure."
The Supreme Court did what it could. It offered a number of "existing tools"--judicial tools--that "district courts can use . . . to screen out meritless claims before discovery." But in my view, employing these options is unlikely to stem the tide of meritless class action litigation. For example, the Cunningham Court noted that defendants may be able to recover attorneys' fees and costs under ERISA's cost-shifting provision, but courts are almost universally disinclined to punish plan participants--who would be on the hook, not their attorneys--for filing a lawyer driven, class action lawsuit, even when meritless. The Court also suggested that defendants could move for sanctions against plaintiffs' counsel or move to dismiss claims for lack of Article III standing, but lower courts are loath to sanction attorneys and are often reluctant to dismiss claims at the pleadings stage for lack of standing.
The Supreme Court's Cunningham decision has had an immediate impact. In the roughly seven months after it was issued, the plaintiffs' bar has filed approximately ten new class action lawsuits including prohibited transaction claims for fees paid to plan service providers. In the seven months before Cunningham, just two such cases were filed approximately. Many other plaintiffs in cases predating Cunningham have amended their complaints to add prohibited transaction claims.
Legislative action is needed to do what the Cunningham Court could not: revise ERISA's text and rebalance the pleadings stage equities. The ERISA Litigation Reform Act offers the following commonsense fixes that would help to restore an appropriate equilibrium.
It would require a plaintiff to plead and prove that a plan paid unreasonable fees for services--not just that the plan paid a service provider.
It would require a plaintiff to plead and prove that an ESOP paid more than fair market value for employer stock in a stock purchase transaction--not just that the transaction occurred.
And it would require courts to stay onerous discovery while considering an early stage motion to dismiss--rather than unlocking the doors to discovery before the plaintiff shows that his or her claims have merit.
IV. Some have suggested that the issues discussed above are not concerning because, they say, the number of ERISA lawsuits is relatively low. But that view ignores the magnitude of the settlements the ERISA plaintiffs' bar has wrung from plan sponsors, fiduciaries, and service providers--especially relative to the value of their claims on the merits. By my firm's estimate, from 2015 to 2024, plaintiffs' firms capitalized on a low pleading bar to the tune of $1.76 billion in strike suit settlements in 401(k) cases alone--as compared to just $3.2 million in final judgments against defendants in such cases over that same timeframe.
ERISA's complexity presents a barrier to entry for new litigants. But a pleading standard-- like the current one--that greases the skids to costly discovery and lucrative cost-of-defense settlements will only incentivize more plaintiffs'-side attorneys to enter the space and file more meritless lawsuits. In fact, it has already happened. By my firm's estimate, the number of plaintiffs' firms filing class action lawsuits involving 401(k) plans has at least doubled since 2019.
V. At bottom, employers voluntarily sponsor retirement plans--to which many also voluntarily contribute millions of dollars--for the benefit of American workers across the country.
ERISA's current statutory scheme has created an opportunistic plaintiffs' bar looking to profit at the expense of plan sponsors, fiduciaries, and the very participants whom they purport to represent.
But plan sponsors and fiduciaries who have met their obligations under ERISA should not have to choose between shelling out millions of dollars in settlements or paying even more to litigate a meritless case through trial. The proposed legislative reforms will help to even the playing field by requiring plaintiffs to plead something, rather than nothing./v
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Footnotes:
i Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 425 (2014).
ii Id.
iii Cunningham v. Cornell Univ., 604 U.S. 693 (2025).
iv Id. at 708-09.
v I am providing this testimony on my own behalf, and not on behalf of Groom or any of its clients.
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Original text here: https://edworkforce.house.gov/uploadedfiles/salek-raham_testimony.pdf
Employee Retirement Income Security Act Industry Committee Legal Center Chair Butash Testifies Before House Workforce Subcommittee
WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following testimony by Glenn Butash, chair of the ERIC Legal Center, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement":* * *
Chairman Allen, Ranking Member DeSaulnier, and Members of the Subcommittee:
On behalf of The ERISA Industry Committee (ERIC), thank you for the opportunity to testify today. My name is Glenn Butash, and I am the Chair of the ERIC Legal Center.1 Today's hearing is an important step ... Show Full Article WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following testimony by Glenn Butash, chair of the ERIC Legal Center, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement": * * * Chairman Allen, Ranking Member DeSaulnier, and Members of the Subcommittee: On behalf of The ERISA Industry Committee (ERIC), thank you for the opportunity to testify today. My name is Glenn Butash, and I am the Chair of the ERIC Legal Center.1 Today's hearing is an important stepin addressing abusive litigation affecting employee benefit plans and their employer and union plan sponsors. ERIC appreciates the opportunity to contribute to this discussion.
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ERIC and the ERIC Legal Center
ERIC is a national advocacy organization exclusively representing the largest employers in the United States as sponsors of employee benefit plans for their nationwide workforces. ERIC member companies offer benefits to millions of employees and their families and are located in every state, city, and Congressional district. With member companies that are leaders in every economic sector, ERIC advocates before Congress and regulatory agencies on public policy issues that affect the ability of employers to sponsor benefit plans.
The ERIC Legal Center advocates for large employers in the courts on legal matters affecting their ability to provide health, retirement, and other compensation benefits to their nationwide workforces. On behalf of ERIC, the Center engages in litigation against state mandates and other measures that threaten the ability of employers to offer uniform nationwide benefits. The Legal Center also participates in cases that have the potential to significantly affect the design and administration of employee benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA).
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1 I also serve as the Managing Counsel, U.S. Compensation and Benefits, at Nokia, an ERIC member company. I am testifying today solely on behalf of ERIC and the ERIC Legal Center, and the opinions expressed in this testimony do not necessarily reflect those of Nokia.
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For example, in the last few years alone, we have filed dozens of amicus curiae (friend of the court) briefs addressing important questions relating to, among other topics, ERISA preemption of state laws affecting employee benefit plans, permissible use of 401(k) plan forfeitures, calculation of actuarially equivalent benefits under a pension plan, and the allegations that must be included in a lawsuit against a benefit plan fiduciary in order to validly state a claim for relief.
For decades, the Committee on Education and Workforce has advanced solutions to some of the most challenging questions facing the tens of millions of Americans that receive health and retirement benefits at work. Oftentimes, those solutions have been creative and bipartisan, such as the SECURE 2.0 Act of 2022. The Committee also recently brought forth legislation to increase transparency and accountability for the U.S. Department of Labor's Employee Benefits Security Administration (EBSA).2 There is near consensus with the bipartisan, decades-long public policy judgment that encouraging benefit plan sponsorship helps strengthen financial security for American workers and retirees. That judgment is threatened by abusive litigation. Yet only modest clarifications of the system's ground rules would be needed to discourage such litigation while maintaining the ability of plan participants to vindicate their rights. For example, reasonable guardrails for pleading a claim for breach of the fiduciary duty in the area of plan costs, for pleading a claim that the fiduciary engaged in certain prohibited transactions, and for pursuing discovery prior to the court's determination that the claims asserted are plausible, are straightforward clarifications that would help discourage abusive litigation and further the bipartisan, decades-long, public policy judgment that encouraging plan sponsorship helps strengthen financial security for American workers and retirees.
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Federal Law Provides Strong Protections for Employee Benefits
The private sector's delivery of employee benefits is the backbone of health care coverage and retirement savings in the United States today. More than 150 million Americans get healthcare coverage through employer-provided plans, and nearly 100 million private sector workers have access to retirement savings plans such as 401(k) plans.3 Large employers, including ERIC members, are at the forefront of delivering high quality, high value, and innovative benefits to tens of millions of Americans.
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2 ERIC strongly supports the EBSA Investigations Transparency Act (HR 2869), which would impose modest annual reporting requirements, such as disclosure about the nature, number, length, and scope of active investigations. The EBSA Investigations Transparency Act would aid Congress in fulfilling its critical oversight responsibilities, ensuring that EBSA's enforcement activities and priorities are transparent and efficient. ERIC also strongly supports the Balance the Scales Act (HR 2958), which would bring transparency to EBSA's reported historical collusion with plaintiffs' lawyers suing benefit plans. EBSA should document this coordination and be transparent with affected employers - and with Congress. Finally, ERIC also supports the Retire Through Ownership Act (HR 5169), which would give certainty to employee stock ownership plan fiduciaries when relying on the work of independent valuation or business appraisers that use practices described in longstanding Internal Revenue Service (IRS) guidance.
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ERIC member companies sponsor health and retirement plans governed by ERISA and other laws and regulations overseen by EBSA, the Treasury Department, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation. ERISA establishes myriad responsibilities for the fiduciaries of these benefit plans, including the twin duties of prudence and loyalty encapsulated in section 404(a) of ERISA.4 That section states, in part: a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and--
(A) for the exclusive purpose of:
(i) providing benefits to participants and their beneficiaries; and
(ii) defraying reasonable expenses of administering the plan;
(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims . . . .
ERISA permits plan participants, beneficiaries, the Labor Department, and other plan fiduciaries to sue for breach of these fiduciary duties.5 In recent years, there has been a tsunami of litigation, ostensibly brought on behalf of plan participants, attacking all manner of decisions made by plan fiduciaries and plan sponsors. To name a few examples, these lawsuits have challenged decisions such as which recordkeeper was retained, which investment funds were offered, how plan forfeitures were used, which annuity provider was selected in a pension risk transfer transaction, and the actuarial assumptions used by defined benefit plans to convert benefits between different annuity types.
ERIC has no quarrel with plan participants pursuing well-founded claims and vindicating their rights in court. However, the past 15 years have seen a surge in frivolous cases not brought to vindicate rights, but instead too often cynically brought by opportunistic lawyers to extract settlements from deep pocketed corporate plan sponsors. In too many of these cases, the actual merits of the suit are not relevant to the settlement value paid in order to avoid the cost and disruption of continuing litigation. And because the federal courts have not spoken uniformly about what a plaintiff must allege to survive a motion to dismiss, these cases unfortunately sometimes become prolonged and expensive.
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3 According to the latest available Federal Reserve data, there are about 136 million private sector workers, on a seasonally adjusted basis. https://fred.stlouisfed.org/series/USPRIV (updated Sept, 5, 2025). According to Bureau of Labor Statistics Data, approximately 70 percent of private sector workers have access to a defined contribution retirement plan. "Employee Benefits in the United States, March 2025" available at https://www.bls.gov/ebs/publications/employee-benefits-in-the-united-states-march-2025.htm (updated September 2025).
4 Codified at 29 U.S.C. Sec.1104. ERISA section numbers will generally be used in lieu of U.S. Code sections throughout.
5 ERISA Sec.502(a)(2); see also ERISA Sec.409.
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Litigation Has Skyrocketed, Threatening ERISA's Underlying Premise that Employers Should Be Encouraged to Offer Benefits
As this Subcommittee well knows, employers are not required to establish employee benefit plans, but public policy has taken pains to encourage the practice.6 Indeed, ERISA reflects a "careful balancing" between ensuring employees receive their promised benefits and encouraging employers to create and maintain benefit plans in the first place.7 As the Supreme Court has stated, Congress endeavored "not to create a system that is so complex that administrative costs, or litigation expenses, unduly discourage employers from offering [ERISA] plans in the first place."8 This balance has served employees and retirees very well.9 ERISA provides the opportunity for judicial remedies in those cases where plan fiduciaries neglect their legal obligations to workers and retirees, cause losses to plan participants, or unscrupulously leverage the plan for self-dealings. These are the situations ERISA was designed to address.
Nevertheless, over the past 15 years, the plaintiffs' bar has exploited ERISA's civil enforcement provisions as a weapon by opportunistically attacking large plan sponsors and fiduciaries in a systematic way. According to a Supreme Court brief recently filed by Encore Fiduciary, a fiduciary liability insurance underwriter, since 2016, over one half of plans with more than $1 billion in assets have been targeted by at least one excessive fee or investment performance lawsuit.10 Plans with $500 million or more in assets have close to a 10% chance of being sued in a given year.11 There are hundreds of lawsuits, dreamed up by attorneys that use allegations that are bare-bones and amenable to nearly identical allegations applicable to a multitude of companies.
The playbook followed by plaintiffs' firms in these cases is both enterprising and deeply unfortunate.
* First, identify virtually any set of decisions that many plans must make where there are multiple market actors: for example, plan recordkeeping, investments available on a 401(k) menu, or the selection of an annuity provider in the case of a defined benefit plan pension risk transfer.
* Second, identify any basis where the options available in the market differ, whether by price, risk, or service.
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6 E.g. Lockheed Corp. v. Spink, 517 U.S. 882, 887 (1996).
7 Conkright v. Frommert, 559 U.S. 506, 517 (2010).
8 Varity Corp v. Howe, 516 U. S. 489, 497 (1996).
9 For example, workers hold around $9 trillion in 401(k) plan assets. Investment Company Institute, "401(k) Resource Center, https://www.ici.org/401k.
10 Brief of Encore Fiduciary as Amicus Curiae in Support of Petitioners, Parker-Hannifin Corp., et al v. Johnson (May 21, 2025), available at https://www.supremecourt.gov/DocketPDF/24/24-1030/359296/20250521120726513_250511a%20AC%20Brief%20for%20efiling.pdf.
11 Id.
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* Third, argue (oftentimes purely in hindsight) that the decision made by the plan fiduciaries was imprudent, even without any particularized evidence that the plan fiduciaries had a flawed process or were cavalier with plan assets and often without any evidence that plan participants even suffered a meaningful, cognizable harm.
* Fourth, identify a set of companies with passably similar plans such that cookie-cutter lawsuit complaints can be drafted with minimal defendant-specific research and optimize the target list for potential settlement value to focus on sophisticated companies with deep pockets and reputations to protect.
* Fifth, after filing suit, threaten to impose hundreds of thousands - even millions - in legal fees related to discovery, motion practice, and ultimately damages, if defendants refuse to accede to unreasonable settlement demands.
* Sixth, collect attorneys' fees as a result of a settlement, often 30 percent or more, while relegating plan participants (especially in plans with many participants) individually to receiving only nominal amounts.
That sixth and final point, above, ought to be particularly concerning to this Subcommittee. There are dozens of major settlements annually, amounting to hundreds of millions of dollars each year.12 And while some class action settlements are large, many result in incredibly small recoveries for actual plan participants, after attorney's fees, expenses, and payments to the named plaintiffs. For example, one suit alleging excessive fees against a large employer settled for $1.35 million after four years of hard-fought litigation.13 After attorneys' fees and expenses, the 50,000 plan participants averaged a recovery of less than $20 each.14
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Abusive Litigation Distorts Plan Decisions and Does Not Benefit Plan Participants
Employers offer benefit plans for a variety of business-related reasons, such as attracting and retaining talent and improving the productivity of workers. The costs of providing these benefits should be predictable and oriented towards delivering value: for example, the actual cost of employer contributions to a 401(k) plan (e.g., the employer match), the cost of medical claims, or the cost of engaging necessary plan service providers. The litigation epidemic disrupts this calculus, introducing a host of inefficiencies and externalities into the benefits ecosystem.
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12 D. Aronowitz & K. Jozwiak, PlanAdviser, 401(k) Excessive Fee Litigation Spiked to 'Near Record Place' in '24 (Jan. 13, 2025), https://www.planadviser.com/401k-excessive-fee-litigation-spiked-near-record-pace-24.
13 Alex Ortolani, Salesforce Settles 401(k) Suits for $1.35 Million, PLANADVISER, available at https://www.planadviser.com/salesforce-settles-401k-suits-1-35m (Sept. 23, 2024).
14 The settlement deducted $449,955 in attorneys fees from the $1.35 million settlement fund and authorized up to $150,000 more for expenses. More than 50,000 participants shared the remainder.
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For example:
* Higher insurance costs can lead to worse benefits. Fiduciary liability insurance rates are increasing. This is a pure transaction cost to the plan: workers and retirees realize no benefit from the costs of this coverage. Indeed, litigation risk and inconsistent pleading standards are key factors in rising liability insurance rates.15 To the extent these costs are factored into the overall cost of providing benefits, the economic answer is simple: the value of the remaining benefits will be reduced, likely in the form of reduced employer contributions or lower levels of benefits.
* Litigation is disruptive to the work of corporate benefits professionals. Even large employers do not have vast internal departments to manage their employee benefits operations. Employees already face challenges to do the work of managing complex, valuable benefits programs: engaging and overseeing vendors, monitoring results, and interacting with the workforce to ensure that health and retirement plans are delivering the value to workers that the business demands. Lawsuits are incredibly disruptive to these operations. Rather than working their day jobs, key employees are forced to spend countless hours gathering documents, preparing for depositions, and talking to outside counsel that charge many hundreds of dollars an hour. All this in the context of lawsuits that amount to fishing expeditions in cases that do not even plausibly allege identifiable, material harm.
* Fear of litigation can distort plan decision-making. When a plan fiduciary is deciding what plan services to contract for, what investment funds to offer, or some other aspect of plan administration, the sole relevant legal standard is whether the decision is prudent under ERISA. And by and large, most plan fiduciaries are appropriately guided by this standard. However, it would be naive to think that, today, plan fiduciaries do not also have in the back of their mind the litigation risks attendant to virtually any decision of consequence in this environment, such as using a service provider that is not the absolutely cheapest available in the market but that offers enhanced valuable services that justify the added expense. This countervailing pressure is at odds with fiduciary obligations.
* Rampant litigation threatens to weaken the system. If a key purpose of ERISA and the myriad tax incentives offered under the Internal Revenue Code is to encourage plan sponsorship, it is counterproductive to have a governing legal regime that introduces litigation risk with virtually any decision. Unfortunately, some employers may decide the costs and risk of offering a defined contribution plan is simply not worth it, which would be a disaster for retirement security. Hence, reform is absolutely necessary.
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15 See e.g. https://www.wtwco.com/en-us/insights/2025/01/fiduciary-liability-a-look-ahead-to-2025 (predicting higher insurance rates if the plaintiffs prevail in the Cornell case, which they subsequently did).
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Congress Should Propose Reasonable Initial Reforms to Provide Clarity to ERISA Litigation
ERIC strongly supports legislation to address the litigation epidemic in a responsible, balanced fashion. Such legislation should incorporate several modest but very important changes, which would ensure that meritorious ERISA cases may continue to be brought, while weeding out those founded on pro forma cookie-cutter allegations. Among the improvements that Congress should consider: (i) requiring a plaintiff, in a case alleging that a contract between a plan and a plan service provider constituted a prohibited transaction under ERISA Sec.406(a)(1)(C), to allege with specificity why that arrangement does not meet the exemption under ERISA Sec.408(b)(2) for necessary and reasonable arrangements with service-providers, (ii) requiring a plaintiff, in a case alleging that the plan paid too much for plan services (whether for recordkeeping, investment management, or any other services), to set forth in the complaint a meaningful cost comparison supporting the claim, and (iii) providing for a stay of discovery (with appropriate exceptions) in ERISA lawsuits. The ERISA Litigation Reform Act, recently introduced by Representative Fine, is an important first step--one which ERIC strongly supports.
These commonsense reforms are discussed in more detail below.
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Addressing the Pleading Standard for Claims Predicated on ERISA Sec. 406(a)(1)(C)
The Supreme Court's recent decision in Cunningham v. Cornell University16 is the quintessential example of a counterproductive court decision that could easily be addressed legislatively to restore balance and reduce ultimately meritless litigation. That case addressed what a plaintiff must plead in a suit alleging a "prohibited transaction" under ERISA with respect to plan services. At issue was section 406(a)(1)(C) of ERISA, which prohibits a plan fiduciary from engaging in a transaction if the fiduciary "knows or should know that such transaction constitutes a direct or indirect-- ... furnishing of goods, services, or facilities between the plan and a party in interest."17 Notably, ERISA includes in its definition of party in interest any person who provides services to a plan.18 Accordingly, on its face, section 406(a)(1)(C) presumptively makes all contracts with plan service providers illegal prohibited transactions. However, section 408(b)(2) exempts transactions from this prohibition so long as the transaction is necessary for the operation of the plan and the plan pays only "reasonable compensation" for the services.19
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16 Cunningham v. Cornell Univ., 604 U.S. 693 (2025).
17 ERISA Sec.406(a)(1)(C).
18 ERISA Sec.3(14)(B).
19 Specifically, section 408(b)(2)(A) provides:
The prohibitions provided in section 406 ... shall not apply to any of the following transactions:
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(A) Contracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.
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In the Cornell case, the Supreme Court held that the exemptions under section 408 of ERISA were affirmative defenses and that accordingly a plaintiff need only plausibly allege the elements of a prohibited transaction under section 406. As a result of Cornell, a plaintiff challenging a plan's engagement of a service provider need only allege the elements of section 406(a)(1)(C); it need not address in its pleading any of the statutory exemptions--even the obvious one in section 408(b)(2). The Supreme Court reached this result based on what it determined to be the structure of the statute and non-ERISA law relating to statutory exceptions to rules of general applicability. In holding that the exemptions to the prohibited transaction rules are affirmative defenses, the Court notably acknowledged that concerns about resultant baseless litigation raised by respondent Cornell University and various amici, including ERIC,20 calling those concerns "serious." [I]f plaintiffs must plead only that a transaction barred by 1106(a)(1)(C)'s plain text occurred, respondents argue, plaintiffs could too easily get past the motion-to-dismiss stage and subject defendants to costly and time-intensive discovery. Such meritless litigation, respondents claim, would harm the administration of plans and force plan fiduciaries and sponsors to bear most of the associated costs. These are serious concerns but they cannot overcome the statutory text and structure.21 The concurring opinion was even stronger in explaining the practical disadvantages of the decision:
The upshot [of the Court's decision] is that all that a plaintiff must do in order to file a complaint that will get by a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is to allege that the administrator did something that, as a practical matter, it is bound to do.... Yet under our decision that is all that a plaintiff must plead to survive a motion to dismiss. And, in modern civil litigation, getting by a motion to dismiss is often the whole ball game because of the cost of discovery. Defendants facing those costs often calculate that it is efficient to settle a case even though they are convinced that they would win if the litigation continued.22 Recognizing the real-world implications of its decision, the Court identified some "tools" that it believed might offer solace to defendants. Respectfully, none of these is truly workable. The Court identified the possibility that a court can order a plaintiff to file a response to the defendants' answering affirmative defense,23 but this is not automatic; a defendant would have to move for such relief, adding cost and delay to the case. The Court also suggested that another limitation on meritless cases is the fact that plaintiffs need to have suffered harm--to have standing under Article III--in order for the case to continue,24 but here again this requires a motion on the part of defendants to bring the issue before the court, again adding cost and delay. The Court also suggested that lower courts could allow targeted early discovery on the issue of an available exemption,25 something that also would add to expense and lead to delay in weeding out a case that lacks merit. And finally, the Court cited the possibility of sanctions under Rule 11 of the Federal Rules of Civil Procedure, and the imposition of attorneys' fees under section 502(g) of ERISA26 as a possible brake on meritless cases. These possibilities exist currently and, needless to say, have not tamed the wave of meritless litigation.
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20 See Joint Trades Brief as Amici Curiae in Support of Respondents, Cunninham v. Cornell Univ. (available at https://www.supremecourt.gov/DocketPDF/23/23-1007/336522/20250103141607914_Cunningham%20Amicus%20Brief.pdf.
21 Cunningham, supra note 16, at 708 (emphasis added).
22 Id. at 710 (Alito, J. concurring) (emphasis added).
23 Id. at 708.
24 Id.
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The regime created by the Cornell decision creates a double-bind for plan fiduciaries any time they consider contracting with a service-provider, such as an investment consultant, investment manager, or recordkeeper: either they engage the service-provider, which is presumptively a prohibited transaction and the case cannot be dismissed based on the pleadings, or they undertake all relevant plan-related services themselves and risk a suit challenging their prudence in not hiring a specialized expert. And let's be clear--the ability to pair a prohibited transaction claim under section 406 with a breach of prudence claim under section 404 adds nothing to a plaintiff's case other than an in terrorem value. The relief under both sections is that set forth in section 502 and section 409--making the plan whole for any losses. If a court found there to have been a prohibited transaction, that transaction would need to be reported on the plan's Form 5500 and the fiduciary would need to pay an excise tax on the "amount involved."27 In short, the prohibited transaction claim simply serves to turn up the heat on plan defendants in the hopes of increasing the likelihood of a settlement and increasing the settlement amount.
As a result of the Cornell case, there are now no limits on the number of lawsuits that can be brought on the basis of engaging a service provider: these relationships are publicly disclosed in plans' mandatory Annual Return/Report (Form 5500) filings with the Department of Labor.28 Information on plan costs charged to participant accounts is described in the fee-and-expense disclosure furnished each year to plan participants.29 Each regulatory filing and participant disclosure is a potential roadmap for an opportunistic plaintiffs' firm looking to extract a recovery or unlock burdensome discovery. This is the case even if there is no evidence that the compensation paid was unreasonable. That is flatly inconsistent with the Supreme Court's direction to lower courts to give "due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise."30
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25 Id. at 709.
26 Id.
27 E.g. 26 U.S.C. Sec.4975.
28 Dep't of Labor, "Form 5500 Series," available at https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500 ("Schedule C - Service Provider Information").
29 29 C.F.R. Sec.2550.404a-5. This annual disclosure document also includes information on plan investment fund performance.
30 Hughes v. Nw. Univ, 595 U.S. 170, 177 (2022). See Joint Trades Brief (including ERIC) as Amici Curiae Supporting Respondents, Hughes v. Nw. Univ., No. 19-1401 (Oct. 28, 2021) (available at https://www.eric.org/wp-content/uploads/2021/12/Chamber-Amicus-Brief-Hughes-v.-Northwestern.pdf).
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Legislation, such as the aforementioned ERISA Litigation Reform Act, can and should correct this absurd and unnecessary result. A plaintiff alleging that a plan fiduciary entered into an arrangement with a party in interest that violates the prohibited transaction rules should be required also to allege facts that the transaction was not exempt under the statute's "reasonable compensation" exception. This would weed out those suits that merely allege that a plan fiduciary engaged a plan service provider without plaintiffs having any basis for claiming that the contract was unnecessary or that the compensation paid was unreasonable. In doing so, it would save millions of dollars in legal fees, discovery costs, and wasted employee time, ultimately to the benefit of workers and retirees.
Legislation correcting the result in Cornell would not be the first time that Congress addressed a Supreme Court decision that upended a component of the benefits system. For example, in John Hancock Mutual Life Insurance Company v. Harris Trust & Savings Bank, the Court considered whether "excess" funds in an insurance company's general account were ERISA plan assets, subjecting the insurance company to ERISA fiduciary duties.31 The insurer, John Hancock, argued that the funds were part of a "guaranteed benefit policy," and therefore exempt. The district court agreed with John Hancock, but the Second Circuit reversed, holding the excess assets to be ERISA plan assets. The Supreme Court agreed with the circuit court.
In its amicus brief, the Department of Labor argued:
"[T]he disruptions and costs [of holding insurance companies to be fiduciaries under participating group annuity contracts] would be significant, both in terms of the administrative changes the companies would be forced to undertake (e. g., segregation of plan-related assets into segmented or separate accounts, and re-allocation of operating costs to other policyholders) and in terms of the considerable exposure to the ensuing litigation that would be brought by pension plans and others alleging fiduciary breaches.'"32 Similar to the majority opinion in Cornell, the Court in Harris Trust conceded the point, but argued its hands were tied, noting: "These are substantial concerns, but we cannot give them dispositive weight. The insurers' views have been presented to Congress and that body can adjust the statute."33 Congress did act a few years later, requiring the Labor Department to issue regulations to smooth the transition and avoid disruption.34 In a similar way, Congress now could address the "serious concerns" caused by the Cornell decision.
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31 John Hancock Mut. Life Ins. Co. v. Harris Trust and Sav. Bank, 510 U.S. 86 (1993).
32 Harris Trust, at 110 (quoting brief).
33 Id. (citations omitted).
34 Sec.146 of P.L. 104-188 (1996).
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Clarifying the Pleading Standards for Breach of Fiduciary Duty Cases
Second, Congress should clarify the pleading standards for a lawsuit alleging a plan paid excessive fees for plan services. Many in the employee benefits community had hoped that the Supreme Court would resolve the question of ERISA pleading standards in the 2022 Northwestern University case.35 Safe to say, the Court's decision in that case did not definitively settle the issue. In the absence of authoritative guidance, the appellate and district courts have continued to adopt various approaches. This confusion has bred not only unpredictability, it has also created an incentive for entrepreneurial forum shopping.36 Forum shopping is a real risk in the context of ERISA lawsuits alleging breach of fiduciary duty in light of ERISA's liberal venue provision.37 Nonetheless, certain principles can be distilled and should be legislatively codified. Where ERISA plaintiffs attempt to plead wrongdoing based on circumstantial facts, the Supreme Court has specifically instructed lower courts to apply "careful, context-sensitive scrutiny" to "divide the plausible sheep from the meritless goats."38 In the Northwestern case, the Court also acknowledged that "the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs," and advised lower courts to "give due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise" in evaluating whether a claim is plausible.39 In these cases, many courts are relying on the "meaningful benchmark" analysis articulated by the Eighth Circuit.40 Too often, however, the plaintiffs' bar launches these suits by choosing inapt comparators. For example, comparing the fees charged by a target date mutual fund to the fees charged by an S&P 500 index fund is not an appropriate comparison, given different risk profiles and investment purposes. Similarly, comparing investment management fees for funds that use an "active" investment strategy, where the fund manager is seeking to outperform a benchmark through stock selection, and a "passive" strategy, where the manager is seeking simply to match the benchmark, is not a meaningful comparison.
Legislation should resolve in a balanced, reasonable way the ambiguities lingering in the lower courts that continue to be exploited by the plaintiffs' bar.
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35 Hughes v. Nw. Univ., 595 U.S. 170 (2022).
36 For a fuller discussion, see Joint Trades Brief (including ERIC) as amici curiae in support of Defendants-Appellee's petition for rehearing en banc, Johnson v. Parker-Hannifin Corp, No. 21-cv-256 (6th Cir.) (Dec. 23, 2024), available at https://www.uschamber.com/assets/documents/U.S.-Chamber-Coalition-Amicus-Brief-Johnson-v.-Parker-Hannifin-Sixth-Circuit.pdf.
37 See ERISA Sec.502(e)(2) (permitting suit in federal district court "in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found).
38 Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409, 424-25 (2014).
39 Hughes, 142 S. Ct. at 742
40 Meiners v. Wells Fargo & Co., 898 F.3d 820 (8th Cir. 2018); see also Matney v. Barrick Gold of N. Am., 80 F.4th 1136 (10th Cir. 2023); Joint Trades Brief (including ERIC), Matney v. Barrick Gold of N. Am., No. 2:20-cv-275-TC-CMR (10th Cir.) (filed 11/4/2022), available at https://www.eric.org/wp-content/uploads/2022/11/FS_Barrick-Gold-Amicus-Brief.pdf.
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For example, if a plaintiff wants to allege the plan fiduciaries breached their duties of prudence with respect to the fees paid to plan service-providers (be they investment advisors, investment managers, plan recordkeepers, or others), legislation could require the plaintiff to:
* Plausibly allege a meaningful cost comparison. That means there should be some plausible allegation that a meaningful number of comparable plans paid materially less for similar services, and that such lower-cost services were reasonable to obtain.
* Make a context-specific cost comparison.
* In the case of a suit alleging that investment management fees were imprudently expensive, support the cost comparison with facts plausibly alleging that the alternative investment options on which plaintiffs rely have similar investment strategies, similar investment objectives, or similar risk profiles.
In our view, these are reasonable criteria that a plaintiff ought to meet in order to sustain a claim alleging imprudence with respect to the cost for plan services. And those criteria should easily be met where there is indeed a suspected breach. The desirable standard effectively boils down to a reasonable requirement: compare apples to apples, don't cherry-pick, and compare in context. This will not shut out suits with appropriate comparisons.
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Staying Discovery Until a Plausible Claim is Sustained
Third, Congress could consider legislation to stay discovery and other proceedings while there is a motion to dismiss pending or a reply to an answer pending. We applaud inclusion of such a provision in the ERISA Litigation Reform Act. This is very important, as discovery is a costly and burdensome process.41 It should be reserved for those cases in which a breach of fiduciary duty can be plausibly alleged. Prior to forcing defendants to incur these costs and burdens, the lawsuit generally should first survive a motion to dismiss. Decisions on those motions can take six months, or even 18 months. Without a formal stay, defendants are at risk of having to respond to discovery for years, particularly if the plaintiffs are given leave to replead the complaint after the initial grant of a motion to dismiss.
That is why an automatic stay is so crucial. The ERISA Litigation Reform Act also includes protections similar to the provisions of the Private Securities Litigation Reform Act.42 These protections include permitting a court to permit particularized discovery if necessary to preserve evidence or to prevent undue prejudice. Additionally, during the stay, parties would be generally required to treat documents, data compilations, and relevant tangible objects as though they were the subject of a continuing request for the production of documents. This would avoid prejudice to any party during the stay. In total, this change could prevent the expenditure of hundreds of thousands of dollars before a court has concluded that the allegations being made are plausible.
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41 This is exacerbated by the Supreme Court's decision in Cornell, which permits discovery in a suit that merely alleges that a plan engaged a service provider, thereby committing a prohibited transaction, without grappling with the myriad exemptions.
42 15 U.S.C. Sec.78u-4(b)(3).
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This is money that would be better spent hiring workers, making products and providing services, and maintaining and even improving benefits.
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Other Proposals
Congress should also consider other measures to improve the landscape. For example, Congress could consider applying reasonable, heightened pleading standards to all cases brought under section 404(a)(1)(B), such as cases alleging that investment funds offered on a 401(k) menu underperformed, or cases alleging defined benefit plan sponsors breached duties when engaging in pension risk transfer transactions, among others. Congress could also address the split in the federal appellate courts about which party has the burden of proving that a loss suffered by a plaintiff was actually caused by an allegedly imprudent act or omission of a plan fiduciary defendant.
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Conclusion
Large plan sponsors provide health and retirement benefits to tens of millions of their employees and their families. Federal law protects these benefits, but abusive litigation and the lack of clarity about relevant legal standards are among the threats the system faces. Congress has an opportunity to reduce these disincentives, ultimately to the benefit of workers, retirees, and job creators. We look forward to working with members of this Subcommittee, with the Committee on Education and Workforce, with other members of Congress, and with the administration to improve the employee benefits system.
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Original text here: https://edworkforce.house.gov/uploadedfiles/butash_testimony.pdf
American Benefits Council Senior VP Dudley Testifies Before House Education & Workforce Subcommittee
WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following testimony by Lynn Dudley, senior vice president of global retirement and compensation policy for the American Benefits Council, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement":* * *
My name is Lynn Dudley, and I am the Senior Vice President, Global Retirement and Compensation Policy, for the American Benefits Council. Thank you for holding this important hearing and for the opportunity to testify.
The ... Show Full Article WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following testimony by Lynn Dudley, senior vice president of global retirement and compensation policy for the American Benefits Council, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement": * * * My name is Lynn Dudley, and I am the Senior Vice President, Global Retirement and Compensation Policy, for the American Benefits Council. Thank you for holding this important hearing and for the opportunity to testify. TheCouncil is a Washington, D.C.-based employee benefits public policy organization. The Council advocates for employers dedicated to the achievement of best-in-class solutions that protect and encourage the health and financial well-being of their workers, retirees and their families. Council members include more than 220 of the world's largest corporations and collectively either directly sponsor or support sponsors of health and retirement benefits for virtually all Americans covered by employer-provided plans.
This hearing comes at a critical time for the private retirement system. Right now, the top issue for our plan sponsor members is the tidal wave of frivolous litigation draining resources away from benefits, inhibiting plan innovation, preventing many new products and services from being offered, and benefiting only the plaintiffs' lawyers.
We strongly support the Committee's attention to this crisis and we look forward to working with the Committee on a solution that restores common sense and curtails the ability of the plaintiffs' bar to benefit at the expense of retirement security.
Where we are today: plaintiffs' lawyers can sue and earn millions in fees without any showing of any ERISA violation or issue.
Today, a plaintiffs' firm can solicit plan participants to sue the plan fiduciary and can file a complaint that simply alleges any one of the following: (1) the plan hired a service provider, (2) plan fees were too high, or (3) a plan's investments did not perform as well as others. Such allegations are simple to make because all plans hire service providers, and there is always some other plan with lower fees (and possibly fewer services or worse investments) or investments with better past performance (and possibly a weaker outlook for the future).
Under the recent U.S. Supreme Court case Cunningham v. Cornell University,/1 a mere statement that a plan has hired a service provider is sufficient to survive a motion to dismiss. This was the case because the Court held that (1) simply hiring any service provider is technically a prohibited transaction even if there is a clearly applicable prohibited transaction exemption by reason of the service provider's fees being reasonable, and (2) a defendant cannot rely on a prohibited transaction exemption to support a motion to dismiss.
Even outside the prohibited transaction regime, with respect to alleged underperformance or fees that are allegedly too high, mere conclusory allegations have been enough in many courts to survive a motion to dismiss. This latter concern is a problem that pre-dated the Cornell decision, so the problem runs much deeper than just that case. That problem is directly attributable to the so-called current-law "inference standard," which allows plaintiffs to survive a motion to dismiss by alleging facts that give rise to an inference that the fiduciary used an improper process. Many courts have interpreted the inference standard to open the floodgates to almost unlimited litigation.
The Supreme Court's Cornell decision will even further exacerbate this problem.
Why is the motion to dismiss stage in litigation so important? Because if the defendants lose the motion to dismiss, the plaintiffs' lawyers (not the participants) have generally won. If a lawsuit survives a motion to dismiss, the next step is discovery, which can cost the plan sponsor many millions of dollars. This puts enormous pressure on the plan sponsor to settle for millions of dollars, to avoid the greater cost and burden of discovery.
This concern about the avalanche of litigation post-Cornell is not only shared by our members, it is also the view of the entire Supreme Court in the Cornell case in the unanimous decision of the Court that put the responsibility for correcting this problem squarely on Congress./2
Lastly, [Defendants] contend that there will be an avalanche of meritless litigation if disproving the applicability of [the relevant statutory exemption] is not treated as a required element of pleading [a prohibited transaction violation based on hiring a service provider]. . . . These are serious concerns but they cannot overcome the statutory text and structure. Here, Congress "set the balance" in "creating [an] exemption and writing it in the orthodox format of an affirmative defense," so the Court must "read it the way Congress wrote it."
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1 145 S. Ct. 1020 (2025).
2 Cornell, 145 S. Ct. at 1031 (internal citations omitted).
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This concern is already materializing. In August, based on Cornell, the U.S. Court of Appeals for the Second Circuit revived a lawsuit against a retirement plan sponsor that had been properly dismissed as baseless in the view of Second Circuit./3
The Second Circuit fully rejected the plaintiffs' claims:
First, Plaintiffs failed to plausibly allege that Defendants imprudently selected and monitored the Plan's investment options because certain investment options underperformed alternatives. . . . Second, the complaint did not plausibly allege that the Committee imprudently monitored fees charged by the Plan's investment advisor and recordkeeper. . . . Third, Plaintiffs argue unpersuasively that they pled circumstantial factual allegations supporting an inference that Defendants employed flawed processes in carrying out their duties.
However, because of Cornell, the Second Circuit was compelled to revive the baseless case, giving the plaintiffs' lawyers the chance to benefit from filing a frivolous suit.
In Cornell, the Supreme Court did go on to suggest a few possible ways to address this avalanche, but even the most promising of the various suggested approaches is "not commonly used," according to the concurring opinion of Justice Alito, joined by Justices Thomas and Kavanaugh./4
District court judges have full discretion not to use it, and, in our experience, it is almost never used. So, there is not a currently workable solution.
This means that the plaintiffs' lawyers walk away with millions of dollars without any showing that the plan did anything wrong - all the plaintiffs' lawyers did was allege that the defendant's plan hired a service provider or another plan paid lower fees or some other investment performed better, without any showing that the fiduciary did anything wrong. And these allegations generally are held to satisfy the sieve-like inference standard. Since the allegations in the different cases are so similar, complaints can be largely reused, making this a low-cost, high-profit business for plaintiffs' lawyers who can and do file multiple lawsuits using extremely similar complaints.
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3 Collins v. Northeast Grocery, 2025 U.S. App. LEXIS 20982 (2d Cir. 2025).
4 The opinion states: "For instance, if a fiduciary believes an exemption applies to bar a plaintiff 's suit and files an answer showing as much, Federal Rule of Civil Procedure 7 empowers district courts to 'insist that the plaintiff' file a reply "'put[ting] forward specific, nonconclusory factual allegations'" showing the exemption does not apply." The concurring opinion states that this is the most promising approach to try to avoid the clear problems facing ERISA plans under this opinion, and goes on to say: "It does not appear that this is a commonly used procedure, but the Court has endorsed its use in the past. . . . District courts should strongly consider utilizing this option--and employing the other safeguards that the Court describes--to achieve 'the prompt disposition of insubstantial claims.' . . . Whether these measures will be used in a way that adequately addresses the problem that results from our current pleading rules remains to be seen." In other words, our best hope is a tool not commonly used by the courts.
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ERISA does not require that fiduciaries make the "best" choice with hindsight; ERISA appropriately requires fiduciaries to use a prudent process to pick investments and manage fees. Under the approach being used today, plaintiffs' lawyers do not need to know if the fiduciary's process has violated the law and thus have no incentive to go beyond making a statement or claim. Because, again, they can put enormous financial pressure on companies just by getting past the motion to dismiss with boilerplate complaints.
Participants do not benefit, only their lawyers benefit: for example, $23 million for lawyers versus $153 for participants.
Over the past decade, retirement plan sponsors have increasingly become the targets of large and expensive class-action litigation. Hundreds of lawsuits have been filed during this period, and in just 2024 alone, for example, 65 retirement plan sponsors were sued because of their voluntary retirement plan offerings - up from roughly 50 lawsuits in 2023 - while in 2022, nearly 90 lawsuits were filed./5
Also, as noted in a recent amicus brief:
Since 2016, over half of plans with $1+ billion in assets have been targeted by at least one excessive fee lawsuit. Some have been sued multiple times./6
There is an illusion that these cases benefit the plan participants. The clear facts, however, show that the cases do not benefit the participants. For example, from the period of 2009 to 2016, attorneys representing plaintiffs in breach of fiduciary duty lawsuits are estimated to have collected roughly $204 million for themselves, while only securing an average per-participant award of $116 (not million, just $116)./7
It is very simple to look at almost any settlement and, with simple arithmetic, figure out that the plaintiffs' lawyers are the only ones truly benefiting. For example, just recently, a case was settled (with final court approval)/8 for what the plaintiffs' lawyers called "the largest-ever ERISA settlement alleging breach of fiduciary duty for failure to remove underperforming investment options." That statement could be misread as indicating that participants are really being helped by the settlement, but the fact is that the only ones really benefiting are the plaintiffs' lawyers. Under the settlement, as approved by the court, the plaintiffs' lawyers are receiving a third of the recovery--$23 million--while the 300,000 participants will get an average of $153 (the remaining $46 million spread among 300,000 participants).
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5 Lawrence Fine & John M. Orr, Fiduciary Liability: A look ahead to 2025, Willis Towers Watson (Jan. 29, 2025), https://www.wtwco.com/en-us/insights/2025/01/fiduciary-liability-a-look-ahead-to-2025.
6 https://www.supremecourt.gov/DocketPDF/23/23-1007/336485/20250103100650208_250101a%20AC%20Brief%20for%20efiling.pdf
7 Thomas R. Kmak, Protect Yourself at All Times - Emphasize Quality, Service and Value Before Fees, Nat'l Inst. of Pension Administrators (Apr. 11, 2016), https://www.nipa.org/blogpost/982039/244084/ProtectYourself-at-All-Times--Emphasize-Quality-Service-and-Value-Before-Fees
8 Order Granting Motion for Final Approval of Class Action Settlement, Final Judgment and Order of Dismissal With Prejudice, Snyder v. UnitedHealth Group, No. 0:21-cv-01049-JRT-DJF (D. Minn. Jun. 24, 2025); see also Judgment in a Civil Case [Regarding Attorneys' Fees], Snyder v. UnitedHealth Group, No. 0:21-cv-01049-JRT-DJF (D. Minn. Jun. 25, 2025).
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Harm to plan participants and retirement security.
The Council recently conducted an informal survey of our members on the effects of the avalanche of litigation. The results are very concerning./9
For example:
* Almost 89% of defined contribution plan sponsors report that the risk of litigation is very, or at least a somewhat, significant factor affecting their decisions to enhance services or provide different investment options.
* Almost 25% have decided against providing more assistance to participants due to the litigation risk.
* Over 43% have decided against offering lifetime income options due to the litigation risk.
* Almost 29% have decided against offering services or investment options simply because other similar plans were not doing so, making the additional services or options vulnerable to litigation.
Supreme Court standard (in cases where a prohibited transaction is not alleged).
As noted, under Cornell, in a prohibited transaction case, all the plaintiff must do to survive a motion to dismiss is state that a plan has hired a service provider. Obviously, this needs to be reversed, as the Supreme Court itself admitted. We strongly commend Congressman Randy Fine for introducing his bill (H.R. 6084) to reverse Cornell with respect to the hiring of service providers, common-sense legislation that helps plans and participants and should be bipartisan.
But, even in fiduciary breach cases pre-Cornell, courts were allowing plaintiffs to survive a motion to dismiss based on conclusory statements or inapt comparisons to other plans' fees or investment performance.
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9 https://americanbenefitscouncil.org/pub/?id=80095a3f-cbb8-e46c-854f-a475d2c68358
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This also has to be addressed by holding lower courts to the standard articulated by the Supreme Court. The Supreme Court has been clear. To survive a motion to dismiss:
Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. . . . While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations./10
Pleading standards proposal to address retirement plan litigation crisis.
The American Benefits Council's proposal would state that in order to survive a motion to dismiss, a complaint must contain specific facts regarding the use of an imprudent process by the plan fiduciary (or specific facts showing an impermissible conflict of interest). Conclusory allegations that the plan fiduciary has violated the law will no longer be a means for plaintiffs' lawyers to benefit at the expense of the retirement plan system by relying on the overly broad inference standard.
Like the Fine bill, our proposal would also provide that plaintiffs cannot avoid this rule by simply asserting that the plan fees paid to service providers are automatically a prohibited transaction, so that all service provider fee cases can automatically survive a motion to dismiss and go straight to discovery. That is the untenable position imposed on the system by the Cornell case. That means that, solely by reason of hiring a recordkeeper, for example, all plans could be sued and the case would go directly to discovery.
We look forward to discussing the above solution and other ideas that will effectively address the retirement crisis facing our private retirement plan system.
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10 Ashcroft v. Iqbal, 556 U.S. 662 (2009).
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Original text here: https://edworkforce.house.gov/uploadedfiles/dudley_testimony.pdf
AARP Foundation Senior VP Rivera Testifies Before House Education & Workforce Subcommittee
WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following written testimony by William Alvarado Rivera, senior vice president for litigation at AARP Foundation, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement":* * *
Government Affairs Director, Financial Security (cflyntbarr@aarp.org)Chairman and Members of the Subcommittee:
Thank you for inviting me to testify about the Supreme Court's recent decision in Cunningham v. Cornell. This case is more than ... Show Full Article WASHINGTON, Dec. 11 -- The House Education and Workforce Subcommittee on Health, Employment, Labor and Pensions released the following written testimony by William Alvarado Rivera, senior vice president for litigation at AARP Foundation, from a Dec. 2, 2025, hearing entitled "Pension Predators: Stopping Class Action Abuse Against Workers' Retirement": * * * Government Affairs Director, Financial Security (cflyntbarr@aarp.org)Chairman and Members of the Subcommittee: Thank you for inviting me to testify about the Supreme Court's recent decision in Cunningham v. Cornell. This case is more thana technical interpretation of ERISA--it is a reaffirmation of Congress's intent to protect the retirement security of millions of American workers.
My name is William Alvarado Rivera, and I serve as Senior Vice President for Litigation at AARP Foundation, the charitable affiliate of AARP. I am honored to be here to testify on behalf of AARP, which advocates for the 125 million Americans age 50 and older. AARP supports these efforts, as retirement security is a core priority for our members and vital to their well-being.
At AARP Foundation, I lead our legal advocacy efforts to protect the rights and advance the interests of people age 50 and older. My team litigates and files amicus briefs in federal and state courts across the country, addressing areas including employment discrimination, employee benefits, housing, consumer fraud, health care, and public benefits. Prior to joining AARP Foundation, I litigated and held senior legal and policy roles at the U.S. Department of Justice and the U.S. Department of Health and Human Services, respectively.
Today, I will focus on the critical importance of ensuring that retirement beneficiaries can protect their benefits and rights under ERISA, reflected in the Supreme Court's unanimous decision in Cunningham v. Cornell University, a case in which we filed an amicus brief in support of the plan participants./1
(See Also Appendix 1.) The Court's 9-0 decision reaffirms ERISA's foundational promise: that plan fiduciaries must act prudently and loyally in managing retirement assets, and beneficiaries must have meaningful access to the courts to enforce those duties. I will explain the case's significance for everyday retirees and why Congress should only work to uphold the standard announced in Cunningham v. Cornell. I will also address unfounded concerns that the Court's ruling will lead to an increase in "frivolous" lawsuits and provide data on ERISA fiduciary litigation trends to demonstrate that the system is functioning as intended-- providing accountability and protecting benefits without overwhelming the courts.
The Retirement Crisis and ERISA's Role in Protecting Beneficiaries America faces a retirement crisis. According to AARP's Financial Security Trends Survey, as of January 2025, nearly seven in ten (69%) adults ages 50-64 are worried about having enough money to be financially secure in retirement./2
The shift from traditional defined benefit pensions to defined contribution plans like 401(k) plans requires individuals to now bear greater risk and responsibility for their retirement security. ERISA, enacted in 1974, was designed to safeguard these retirement assets by imposing strict fiduciary duties on plan managers: they must act solely in the interest of participants and beneficiaries, with prudence, loyalty, and care. To be clear, the shift from defined benefit plans to defined contribution plans makes this standard more important than ever as everyday Americans now rely on financial professionals to safeguard their retirement nest egg built up through a lifetime of hard work.
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1 Louis Lopez et al., "Brief of Amici Curiae AARP and AARP Foundation in Support of Petitioners," November 26, 2024, https://www.aarp.org/content/dam/aarp/aarp_foundation/2024/CunninghamBrief.pdf.
2 Kathi Brown, "AARP Financial Security Trends Survey, January 2025," May 2025, https://doi.org/10.26419/res.00525.049.
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For everyday retirees, these protections are not abstract. They mean the difference between a dignified retirement and financial hardship. Fiduciary breaches, such as offering high-fee investment options or failing to monitor plan expenses, can erode savings by tens of thousands of dollars over a lifetime. When fiduciaries prioritize their own interests or those of service providers, beneficiaries suffer lower returns and higher costs. It can cost them 20% or more of their nest egg--that's tens of thousands of dollars for the typical retirement saver./3
ERISA's private right of action under Section 502(a) is a critical part of ERISA's enforcement framework.
It empowers participants to go to court to remedy breaches of fiduciary duties, seeking to restore benefit losses and ensure accountability.
Prohibited Transactions and the Supreme Court's Unanimous Decision in Cunningham v. Cornell
Let me begin with the core issue. ERISA's prohibited transaction rules are designed to prevent conflicts of interest and ensure fiduciaries act solely in the interest of plan participants. For decades, however, many courts imposed a heightened pleading standard--requiring plaintiffs not only to allege a prohibited transaction but also to anticipate and negate statutory exemptions that a fiduciary may raise. That approach often shuts the courthouse doors before any meaningful review of fiduciary conduct can occur.
In this case, participants in Cornell's retirement plans alleged that fiduciaries violated Section 406(a)(1)(C) of ERISA by causing the plan to engage in transactions with service providers who were "parties in interest." Specifically, they breached their duties by engaging in prohibited transactions for recordkeeping services, paying these service providers substantially more than reasonable recordkeeping fees.
The Supreme Court unanimously rejected the approach that participants must also negate a potential exemption at the outset. Writing for the Court, Justice Sotomayor made it clear: to state a claim under Section 406(a)(1)(C) of ERISA, a plaintiff need only allege the elements of that provision itself--that a fiduciary knowingly caused the plan to engage in a prohibited transaction with a party in interest. The burden of proving exemptions under Section 408 belongs to the defendant, as Congress intended. These exemptions are affirmative defenses, not pleading hurdles that a participant must first clear before moving forward. The Supreme Court ruling returns to the statutory intent of ERISA, restores the pleading bar for participants, and ensures that fiduciary decisions involving plan assets receive the rigorous review Congress intended.
Justice Alito's concurrence adds a practical note: courts can require plaintiffs to respond to affirmative defenses early, streamlining litigation without sacrificing ERISA's core protections.
The bottom line is this: Cunningham v. Cornell strengthens the promise Congress made when it enacted ERISA--that fiduciaries must act solely in the interest of participants. It ensures that factory workers, truck drivers, construction workers, office workers, teachers, nurses, and countless others have a fair chance to challenge transactions that put their retirement at risk.
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3 The White House, "FACT SHEET: President Biden to Announce New Actions to Protect Retirement Security by Cracking Down on Junk Fees in Retirement Investment Advice," October 31, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/31/fact-sheet-president-biden-to-announcenew-actions-to-protect-retirement-security-by-cracking-down-on-junk-fees-in-retirement-investment-advice/.
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Why does this matter? Because ERISA is not just a statute--it is a promise. A promise that when workers put their hard-earned money into retirement plans, those assets will be managed prudently and loyally. If procedural barriers prevent claims from being heard, that promise is broken. Cunningham restores balance between everyday working Americans and large financial firms. It ensures that allegations of conflicted transactions receive judicial scrutiny, rather than being dismissed on technicalities that deny workers their day in court.
The significance of this decision cannot be overstated. For most Americans, their retirement savings represent their life's work as well as sacrifices and a commitment to saving. ERISA's fiduciary duties of loyalty and prudence, reinforced by its prohibited transaction rules, exist to protect those savings from conflicted deals and excessive or opaque fees.
Beneficiaries trust fiduciaries--employers, plan administrators, and service providers--to manage those savings prudently and loyally. When fiduciaries breach that trust, the consequences can be devastating: diminished retirement income, delayed retirement, and create a greater reliance on Social Security and safety net programs.
The Cunningham case involved allegations that Cornell University paid excessive fees to record keepers--fees that were allegedly far above market rates. These costs are ultimately borne by plan participants, reducing their retirement savings. The ability to challenge such transactions is not a matter of legal technicality--it is fundamental to ERISA and a matter of economic fairness.
Thus, for plan participants, the Cunningham decision means greater accountability and transparency. For fiduciaries, it is a reminder: compliance is not optional, and documentation of exemptions is critical. For Congress, it underscores that ERISA's enforcement framework remains vital--and that participants' access to judicial remedies plays a key role in ensuring its effectiveness.
In short, Cunningham v. Cornell is a victory for the principle that retirement security deserves more than lip service. It deserves meaningful enforcement.
Why Congress Should Reject Efforts to Change the Cornell Standard Congress should not tinker with what the Supreme Court unanimously decided in Cunningham v. Cornell. Any legislative attempt to overturn or narrow the holding announced in that case would directly undermine ERISA's core protections and impose greater harm and risk to retirement beneficiaries.
The Cornell Court correctly placed the burden on fiduciaries to defend their actions once a plausible prohibited transaction is alleged. Proposals to shift that burden by requiring plaintiffs to affirmatively disprove potential fiduciary defenses in advance would be contrary to ERISA's broad remedial purpose and to the common law of trusts, which undergirds ERISA's statutory framework.
Requiring that plan participants plead information that lies solely within the control of fiduciaries at the outset of a case improperly shifts the burden in ERISA cases. This will effectively exclude potentially meritorious claims and absolve fiduciaries for breaches of their duties under ERISA.
Under trust law principles embedded in ERISA, fiduciaries bear the burden of proving that their decisions were prudent and loyal once a breach is shown. Shifting this burden to plaintiffs up front would force everyday retirees--many with limited resources and no access to plan records--to disprove complex fiduciary justifications before discovery even begins.
Indeed, the harms to beneficiaries would be profound. Because service provider contracts and fee details are within the defendants' control, it is appropriate that defendants bear the burden to establish a Section 408 exemption. Requiring participants to negate exemptions they cannot access without discovery is fundamentally unfair. A retiree challenging a prohibited transaction would need to gather evidence on the amount of the fees and the nature of the services provided--information typically held by the fiduciary--without the benefit of subpoenas or document production. This would effectively immunize fiduciaries from accountability for imprudent actions, such as failing to address excessive fees on recordkeeping rates. Small-dollar harms, which compound over decades, would become unenforceable. A worker losing hundreds or thousands of dollars annually to excessive fees and costs might never recover, even though across a plan with thousands of participants, the total loss could be in the millions of dollars.
Such a shift would also exacerbate the retirement crisis. Studies show that excessive fees reduce retirement savings by 20-30% over a career./4
If Congress chose to begin shielding fiduciaries from plan-wide challenges, these losses would persist unchecked, disproportionately harming lower- and middle-income workers who rely most heavily on 401(k) plans to meet their basic necessities. The result: delayed retirements, reduced living standards, and increased reliance on public benefits--costs ultimately borne by taxpayers.
The Cornel Court standard is a fundamental feature, not a bug. It ensures fiduciaries manage the entire plan prudently, not just the funds a particular plaintiff happens to own. Congress should preserve this balance, consistent with ERISA's text and the Supreme Court's unanimous interpretation.
Addressing Concerns About "Frivolous" Lawsuits Some defense lawyers and industry voices have claimed that the Cunningham decision will invite a flood of frivolous ERISA lawsuits, burdening plans and fiduciaries. These concerns are overstated and ignore the data. ERISA litigation serves a vital deterrent function, ensuring fiduciaries prioritize beneficiaries' interests. Far from being frivolous, these cases often uncover real harms, leading to reforms like fee reductions and improved investment menus. It is important to note that folks who pursue these cases are doing so in an attempt to recover their money that was siphoned away by those they entrusted to look after it.
Data on ERISA fiduciary-breach litigation--primarily excessive fee and imprudent investment cases--show no explosion of filings. According to industry reports, filings have fluctuated but remained manageable relative to the millions of ERISA plans nationwide. From 2016 to 2023,
approximately 450 such cases were filed, averaging about 56 per year./5
This represents a tiny fraction of the over 800,000 ERISA-covered retirement plans.
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4 Ibid.
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Moreover, the Court in Cunningham highlighted certain existing tools that district courts can use to eliminate meritless claims before they progress to discovery. For example, the Court pointed to Federal Rule of Civil Procedure 7, under which a court can require the plaintiff to file a reply to a defendant's answer. If a plaintiff cannot put forth specific, nonconclusory factual allegations showing that a Section 408 exemption does not apply, the Court explained, a district court can dismiss their suit.
In addition, the Court highlighted that standing under Article III remains a valid basis to dismiss a case, recognizing that its decision does not change the constitutional requirement of a concrete injury to present a justiciable case or controversy. Courts also can order limited or expedited discovery in ERISA prohibited transaction cases that survive motions to dismiss, which would help to mitigate unnecessary litigation expenses. And, of course, the threat of sanctions and fee-shifting under ERISA remain available to deter meritless litigation.
ERISA litigation is not a free-for-all. Courts are fully equipped to manage discovery, apply pleading standards, and dismiss weak claims; strong ones can proceed to fact development. The Supreme Court's decision in Cunningham does not lower the bar--it simply affirms that plan participants have the right to challenge transactions that Congress deemed inherently suspect.
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Conclusion
The Supreme Court's unanimous decision in Cunningham v. Cornell upholds ERISA's promise-- fiduciaries must act solely in the interest of participants and beneficiaries, and conflicted transactions are prohibited unless a valid exemption is proved--and empowers everyday retirees to safeguard their hard-earned savings. By affirming beneficiaries' burden to plausibly allege that a plan engaged in a per se prohibited transaction and requiring the defendant to prove any exemption, it closes gaps that could otherwise allow imprudence to go unchecked, potentially costing retirees billions of dollars. For the average worker, the difference between reasonable and excessive fees and costs across years can be the difference between a secure retirement and a precarious one. This is an especially salient point given the retirement crisis we find ourselves in.
Access to legal remedies is not the enemy of retirement security--it is its safeguard. ERISA's enforcement mechanism relies on the ability of participants to hold fiduciaries accountable. The Department of Labor cannot police every plan; it was never intended to. Indeed, as we noted in our Cunningham brief (at 14):
ERISA expressly empowers four distinct classes of persons--the Secretary of Labor, participants, beneficiaries, and fiduciaries--to bring civil actions for relief when fiduciary duties have been breached in violation of the statute. 29 U.S.C. Sec.Sec. 1132(a)(2), 1109(a). While the Department of Labor (DOL) is tasked with administering ERISA, Congress intended the "principal focus of the enforcement effort" to be civil litigation initiated by all four classes of plaintiffs. H.R. Rep. No. 93-533 (1974).
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5 https://www.carltonfields.com/insights/expect-focus/the-case-of-excessive-fees-supreme-court-to-investigate-pleading-standard-in-erisa-excessive-fee-li
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When participants are denied access to the courts, fiduciary misconduct goes unchecked.
Congress must preserve this standard and reject any efforts to shift burdens onto plaintiffs or limit the ability of participants to enforce their rights. AARP urges the Subcommittee to support the ability of participants to protect their hard-earned life savings under ERISA, ensuring fiduciaries act in beneficiaries' best interests and fostering a more secure retirement system for all Americans.
Thank you for your leadership on this critical issue of protecting the retirement security of the American people. I am happy to answer any questions or provide additional information.
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Original text here: https://edworkforce.house.gov/uploadedfiles/rivera_testimony.pdf
Chincoteague Mayor Bowden Testifies Before House Natural Resources Subcommittee
WASHINGTON, Dec. 10 -- The House Natural Resources Subcommittee on Federal Lands released the following testimony by Chincoteague Mayor Denise Bowden from a Dec. 2, 2025, legislative hearing on the Safe Beaches, Safe Swimmers Act (H.R. 5063):* * *
Assateague Island, VA is such a valuable resource for recreation to not only to our locals but also to our 1.0 million plus visitors each year. Between the golden sands of sunbathing, the rich fishing areas, to the swimmers and surfers to even the beachcombers and bird watchers, the area is populated heavily during peak summer season.
There have always ... Show Full Article WASHINGTON, Dec. 10 -- The House Natural Resources Subcommittee on Federal Lands released the following testimony by Chincoteague Mayor Denise Bowden from a Dec. 2, 2025, legislative hearing on the Safe Beaches, Safe Swimmers Act (H.R. 5063): * * * Assateague Island, VA is such a valuable resource for recreation to not only to our locals but also to our 1.0 million plus visitors each year. Between the golden sands of sunbathing, the rich fishing areas, to the swimmers and surfers to even the beachcombers and bird watchers, the area is populated heavily during peak summer season. There have alwaysbeen lifeguards on Assateague Island, VA for as far back as I can remember to my childhood. They play such a vital role in the safety of those people mentioned above and this past summer it was difficult not having them in place for the whole part of the summer season. They have saved countless lives and have provided first aid in many situations. The nearest rescue squad is on neighboring Chincoteague Island which, while not far away, traffic getting to Assateague Island can make it exceedingly difficult in getting to a patient or drowning victim in a timely manner.
We had people reach out to the town this past summer to let us know that they were rethinking their trip to Chincoteague Island due to the lack of a safe experience at the beach itself. As you know, Chincoteague Island is dependent on tourist dollars along with the surrounding Eastern Shore. We do not want to lose revenue in any circumstances.
The National Park Service ended up funding the majority lifeguard services this past summer with the Town of Chincoteague and Accomack County picking up the rest of the tab for contracted services out of Va Beach, Va to which the town nor the county has been reimbursed. However, an agreement could not be reached until well into the summer season, cutting lifeguard coverage short for most of the summer. We cannot afford to do this again, nor should we have to.
Funding lifeguards is critical; it is paramount and should take precedence for the summer seasons on this federal land. Saving dollars is one thing; saving lives is a whole different story. You cannot put a price tag on someone's life. Especially if they are just trying to enjoy that life sitting on a beautiful beach with their family and friends.
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Original text here: https://docs.house.gov/meetings/II/II10/20251202/118666/HHRG-119-II10-Wstate-BowdenD-20251202.pdf
American Sportfishing Association Pacific Fisheries Policy Director Phillips Testifies Before House Natural Resources Subcommittee
WASHINGTON, Dec. 10 -- The House Natural Resources Subcommittee on Water, Wildlife and Fisheries released the following testimony by Larry Phillips, Pacific fisheries policy director of the American Sportfishing Association, from a Dec. 3, 2025, hearing entitled "Sea Lion Predation in the Pacific Northwest":* * *
Chair Hageman, Ranking Member Hoyle, and Members of the Subcommittee, thank you for the opportunity to testify today. My name is Larry Phillips, and I serve as the Pacific Fisheries Policy Director for the American Sportfishing Association. ASA represents the country's recreational ... Show Full Article WASHINGTON, Dec. 10 -- The House Natural Resources Subcommittee on Water, Wildlife and Fisheries released the following testimony by Larry Phillips, Pacific fisheries policy director of the American Sportfishing Association, from a Dec. 3, 2025, hearing entitled "Sea Lion Predation in the Pacific Northwest": * * * Chair Hageman, Ranking Member Hoyle, and Members of the Subcommittee, thank you for the opportunity to testify today. My name is Larry Phillips, and I serve as the Pacific Fisheries Policy Director for the American Sportfishing Association. ASA represents the country's recreationalfishing industry and the many businesses whose livelihoods depend on healthy salmon and steelhead runs across the Pacific Northwest.
Recreational fishing is part of the identity of this region. From Puget Sound to the Columbia River Basin and along the coasts of Washington and Oregon, salmon seasons support thousands of jobs, strengthen local economies, and carry forward cultural and family traditions.
Nationwide, recreational fishing contributes more than 230 billion dollars annually, and anglers directly invest nearly 2 billion dollars a year into conservation.
For decades, federal, state, and tribal partners - as well as anglers - have invested heavily in salmon recovery through habitat restoration, hatchery modernization, harvest reform, and hydropower mitigation. But one major factor continues to erode those gains: pinniped predation on salmon and steelhead.
Today's pinniped populations are healthy, fully protected, and significantly larger than when systematic surveys began in the 1970s, following passage of the Marine Mammal Protection Act.
While we cannot precisely quantify pre-contact abundance, science shows these populations have rebounded dramatically in the modern era and many stocks are at or above their optimum sustainable population levels. That recovery is a conservation success, but it also means predation pressure on salmon has grown far beyond what recovery efforts were designed to absorb.
In the Columbia River, sea lions that were nearly absent in the 1990s can consume a significant portion - estimated as high as - 40 percent - of the spring Chinook run in a single season. Thanks to the leadership of Senator Risch, Senator Cantwell, Representative Newhouse, Representative Schrader and others, the 2018 Endangered Salmon Predation Prevention Act provided targeted tools, and early results show improved salmon survival.
But the MMPA still prevents meaningful action in many areas where predation is most acute.
In Puget Sound, harbor seals consume 6 to 14 percent of juvenile Chinook annually and as much as one-third of steelhead smolts in certain estuaries. Along the Washington and Oregon coasts, Steller sea lions consumed more than two million juvenile Chinook in just eight months. These losses undo gains made through habitat restoration, hatchery reform, and harvest constraints.
And outside the Columbia River, managers lack a workable path under current law to intervene.
I want to acknowledge that this is a polarizing and emotional topic. Pinnipeds are an important part of the ecosystem, and their recovery is a real success of the MMPA. We also appreciate the thoughtful, science-driven work already being done by federal, state, and tribal co-managers, often under very limited authority. Our goal is not to diminish those efforts but to ensure managers have the balanced tools needed to conserve both salmon and pinnipeds.
To support recovery, ASA urges Congress to consider several targeted, science-based updates to the MMPA:
* First, create a streamlined pathway for managing predatory pinnipeds in Puget Sound and along the Washington and Oregon coasts by expanding the location-based approach in Section 120(f).
* Second, extend management authority to predation hot spots including Puget Sound, both coasts, and Columbia River tributaries such as the Cowlitz and Lewis rivers.
* Third, provide dedicated federal funding to support monitoring, removals, and ongoing scientific analysis.
* Fourth, extend MMPA management authority to Washington's treaty tribes and work collaboratively with Oregon's tribal governments.
* Finally, pinniped management must complement - not replace - investments in habitat, hatcheries, hydropower mitigation, and harvest reforms. But we must be honest: continuing to spend billions on recovery and continually restricting fisheries, without meaningfully addressing predation, will produce a predictable outcome - and it will not be recovery.
The sportfishing community cares deeply about conservation. We want future generations to fish for salmon across the Northwest. To achieve that, we must address all limiting factors, including marine mammal predation.
Thank you for your time and for your continued leadership. I look forward to your questions.
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Original text here: https://docs.house.gov/meetings/II/II13/20251203/118718/HHRG-119-II13-Wstate-PhillipsL-20251203.pdf