"Litigation reform and the Supreme Court's Cornell decision ... Risk transfer litigation ... Alternative assets Executive Order.... Proxy advisory firm Executive Order.... DOL intends to revise ESG regulation.... Aronowitz confirmed as EBSA head ... DOL advisory opinion on lifetime income QDIA.... DOL 'non-enforcement' policy for transfers of small retirement benefits to state unclaimed property funds.... DOL files amicus briefs requesting Supreme Court review of two key ERISA fiduciary decisions and supporting sponsor fiduciaries.... Forfeiture litigation." MORE >>
35 pages. "This report examines the impact of ESG model selection and parameter uncertainty on pension fund outcomes ... and illustrates selected risks using simulation-based modeling of the assets of a simple pension fund. " MORE >>
"[DOL's EBSA] returned from the longest government shutdown to find that the February deadline set by [EO 14330] ... calling on Labor to consider writing new guidance, is suddenly a month and a half closer.... In addition to the types of assets typically classified as 'alternative assets' ... the executive order also included lifetime retirement income. This ... could mean that EBSA will consider longstanding industry hopes for broader guidance, potentially regulations, permitting 401(k) plans to use defaults to spur takeup of retirement income." MORE >>
"[T]he final judgment obtained by the plaintiff's politically charged crusade against American Airlines has an unfortunate streak of irony. That is, the plaintiff's lawsuit alleging that American Airlines engaged in political activism with no monetary benefit for the plan turned out to itself be a form of political activism with no monetary benefit for the plan.... Following the court's September order, the plaintiff's attorneys filed a motion asking the court to award nearly $8 million in attorneys' fees. If the court grants the millions of dollars requested in attorneys' fees, it will provide plenty of incentives for copycat lawsuits against similarly situated plan sponsors." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)] MORE >>
"The plaintiffs-appellants assert that en banc review should be granted because it 'will [] further ERISA's goals of establishing a uniform regulatory regime over employee benefit plans.' They point out that 'a total of seven other circuits have rejected an exhaustion requirement for fiduciary breach and statutory claims under ERISA' and argue that if the case had of been brought in 'virtually any other circuit, Plaintiffs would have been permitted to proceed on the merits.' " [Bolton v. Inland Fresh Seafood Corp. of Am., Inc., No. 24-10084 (11th Cir. Oct. 15, 2025; pet. for rehearing filed Nov. 5, 2025)] MORE >>
"[T]he Restoring Integrity in Fiduciary Duty Act [S 3086] ... [provides that] fiduciaries would be limited to consider only financial factors of an investment when making decisions about investment options.... [T]he Providing Complete Information to Retirement Investors Act [S 3083] ... would require notices to plan participants each time they allocate money in or out of a brokerage window (i.e., self-directed investments not selected by a fiduciary) and may result in lower returns." MORE >>
"[T]he airline has requested that the injunction be amended to apply only to the managers of the Plan's core investment options and not to the thousands of investment options available through BrokerageLink, the Plan's brokerage window, 'which American does not select, control or influence.' " [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025; motion for reconsideration filed Oct. 28, 2025)] MORE >>
"[E]ven though American Airlines followed a prudent investment selection process and there were no monetary damages to award because no losses could be tied to American's decisions, the court injected itself into running the plans permanently and ordered that annual disclosures not required by ERISA be given to all participants.... ERISA explicitly permits courts to grant injunctive relief, but it is far from clear that the specific relief awarded in the second American Airlines decision is consistent with ERISA or even with the first American Airlines decision." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)] MORE >>
"Plan fiduciaries and plan sponsors should: [1] consider how the activities of investment managers and other service providers, including activities outside of direct services to the plan, could be perceived to create conflicts of interest; and [2] review service provider contracts and internal policies and procedures for avoiding and managing such conflicts." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)]
"While the regulatory pendulum continues to swing, fiduciaries should focus on upholding the ERISA duties of prudence and loyalty ... [1] Monitor for updates on rulemaking ... [2] Update investment policy statements to reflect current standards ... [3] Consult legal and investment advisers on ESG integration ... [4] Ensure fiduciary committees understand their duties and the evolving landscape; and [5] Communicate with participants." MORE >>
"Although this case is somewhat unique in finding a breach of duty of loyalty but not prudence, it serves as a reminder to Plan fiduciaries that, even where no monetary damages are awarded, a court can still award significant equitable relief to remedy a breach of ERISA fiduciary duty." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)] MORE >>
"The case will almost certainly focus more attention on the proxy voting policies and procedures of ERISA plans, and the extent to which the managers of funds in which ERISA plans invest are attempting to pursue ESG objectives through proxy voting and other types of shareholder activism. However, it appears unlikely that the case will prompt a wave of ERISA class actions by plaintiffs' attorneys in the absence of a coherent nexus between a fund manager's consideration of ESG factors and a loss to the plan." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)] MORE >>
"The court issued tailored injunctions aimed at stewardship practices, fiduciary independence and transparency while declining to disturb the plans' investment structure.... [E]ven though there are no monetary damages, [the judgment] imposes significant restrictions on how American Airlines and its plan fiduciaries can manage their plans going forward.... ERISA fiduciaries should be taking steps to demonstrate how all investment decisions and shareholder engagement/proxy voting activities are driven by pecuniary objectives." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)] MORE >>
"That these behaviors produced no injury ... would almost seem to make the litigation irrelevant, though apparently Judge O'Connor saw enough evidence of biased behaviors that he felt it necessary to impose what would seem to be a fairly long and tedious list of procedural and notification requirements on the administration of the plan going forward." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Sep. 30, 2025)] MORE >>
"The DOL framed the agenda as 'a set of high-priority actions designed to reduce unnecessary burdens on employers and employees.' A release from DOL indicated that regulatory actions on ESG, independent contractors, and pharmacy benefit managers (PBM) would be of highest importance. A new proposal on independent contractors could be imminent, according to the agenda." MORE >>
"The Trump Administration has shifted away from Biden-era rules related to certain investments, like alternative asset investments, ESG, and cryptocurrency in 401(k) plans.... [P]lan fiduciaries interested in alternative assets as an investment offering should carefully monitor forthcoming guidance from the DOL, SEC and the Treasury." MORE >>
"Three fourths of survey participants with a 401(k) or equivalent had interest in sustainable investing, reportedly driven by a conviction in such investments' ability to produce attractive financial returns ... [F]rom 2022-24, average performance for a screen of 542 US-domiciled sustainable funds trailed the Morningstar US Market Index by over 7 percentage points. Year to date, however, this trend has notably reversed, with US sustainable funds posting a 7.23% average return against a 5.99% return for the Morningstar US Market Index." MORE >>
"[T]he Protecting Prudent Investment of Retirement Savings Act (HR 2988) would also impose new participant notice requirements for defined contribution (DC) plans that offer brokerage windows and prohibit fiduciaries from considering diversity criteria when hiring service providers." MORE >>
"Although the 2025 Release is a significant departure from the previous guidance, it explicitly stops short of endorsing the inclusion of cryptocurrency in 401(k) plan investment menus. Therefore, under current guidance, plan fiduciaries will be required to make their own judgment regarding the prudence of including such an investment option." MORE >>
"While it is anticipated that a new rule will not permit plan fiduciaries to consider ESG factors, it remains to be seen whether a prudent investment selection process will be limited to a review of financial factors, such as revenue, earnings, profitability, and reasonable fees, or whether other nonquantitative factors will continue to be permissible criteria for fiduciaries to consider." MORE >>
"According to a Status Report filed before the U.S. Court of Appeals for the Fifth Circuit, the DOL will now pursue changing and/or rescinding the existing ESG regulation through a formal regulatory notice-and-comment period." [Utah v. Chavez-DeRemer, No. 23-0016 (N.D. Tex. Feb. 14, 2025; on appeal to 5th Cir. No. 23-11097)] MORE >>
"[T]he Teachers’ Retirement System (TRS), New York City Employees’ Retirement System (NYCERS) and Board of Education Retirement System (BERS) have instructed their public markets asset managers to submit a written plan describing their net zero plans, by June 30. In the written plans, the managers are expected to adopt the following practices ... [1] Engage portfolio companies to drive real economy decarbonization, not just portfolio decarbonization. [2] Incorporate material climate change-related risks and opportunities in investment decision-making. [3] Ensure a robust and systematic stewardship strategy that addresses prioritization and escalation of engagement and voting to advance decarbonization." MORE >>
"The decision in Spence ... highlights how an alleged failure by plan fiduciaries to fully consider proxy voting policies and activities of investment managers for 401(k) investment funds can lead to successful claims that the duty of loyalty has been breached, and at least partially opens another avenue for fiduciary attack on 401(k) plans. The decision may especially suggest a closer look at a plan's relationships and oversight of investment managers who also hold significant economic stakes in the plan sponsor." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Jan. 10, 2025)] MORE >>
