Over the past two decades, a lot of (very expensive) ink has been spilled in courts around the country in ERISA litigation cases regarding a single question: how much does a plaintiff need to say in a complaint alleging that a prohibited transaction has occurred, to survive an early motion to dismiss? The question seems very academic, at first, but the answer has significant implications for sponsors and fiduciaries of employee benefit plans. On April 17, 2025, a unanimous Supreme Court weighed in, resolved a split between federal circuit courts and put the issue to rest, concluding that plaintiffs alleging violations of ERISA’s prohibited transaction provisions need not plead facts to show that service provider arrangements are unreasonable, but rather that it is the burden of defendants to plead and prove that arrangements between plans and service providers are reasonable and no more than reasonable compensation is paid for those

On January 15, 2025, the Employee Benefits Security Administration (EBSA) published a final rule updating its Voluntary Fiduciary Correction (VFC) Program (the “Updated VFC Program”), based on proposed rules issued in November of 2022. The Updated VFC Program will take effect on March 17, 2025. The most significant changes to the VFC under the Updated VFC Program are the addition of two new self-correction features for common plan failures: Other changes under the revised program include (i) alternative corrections for prohibited transactions involving certain plan loans made at below-market interest rates, (ii) corrections for purchase and sale transactions involving the plan and parties in interest, and certain clarifying changes. This article focuses on the new self-correction opportunities. VFC Application Process.  Under the prior version of VFC (effective through March 16, 2025), plan fiduciaries were permitted to correct certain fiduciary breach violations and prohibited transactions under the Employee Retirement Income Security

The United States District Court for the District of New Jersey dismissed without prejudice, and with leave to amend, Ann Lewandowski’s breach of fiduciary duty claims against Johnson & Johnson and its Pension & Benefits Committee (the “Health Plan Fiduciaries”), stating that she lacked Article III standing.  (Lewandowski v. Johnson & Johnson, et al., D.N.J., No 3:24-cv-00671) (The “J&J Case”).  The focus of the lawsuit was the allegation that the Health Plan Fiduciaries  entered into an agreement with the pharmacy benefit manager (PBM) for the health plans that required the health plans and the participants to overpay for the costs of prescription drugs. The Complaint in the J&J Case.  The First Amended Complaint alleged the following breaches of fiduciary duties by the Health Plan Fiduciaries: The allegations are based on the ERISA requirement that fiduciaries must “discharge [their] duties with respect to a plan solely in the interest of the participants