2025 - The (Retirement) Year in Review

 By almost any measure, 2025 was a remarkable year for retirement plans — perhaps especially because it passed without any sweeping, system-altering legislation. Not that that is (necessarily) a bad thing.

There was no SECURE Act moment, nor Pension Protection Act-scale reset. While retirement plans “ducked” the One Big Beautiful Bill Act, 2025 brought with it challenges of implementation, interpretation, and an extraordinary amount of litigation. Rules were finalized, challenged, and reconsidered; courts grappled with fundamental ERISA questions; a new Administration “recalibrated” long-held positions; and plan fiduciaries were reminded — again — that prudence is ultimately, if not immediately, judged by process, not outcomes.

Taken individually, many of these developments might seem incremental. Taken together, they made 2025 one of the most consequential years for the retirement system in quite some time.

Let’s take a look back at the year that was…

January

In the waning days of the Biden Administration, the year opened with a flurry of rulemaking from the Labor Department, Treasury, and the IRS. The activity touched several outstanding SECURE 2.0 provisions — including catch-up contributions, automatic enrollment for newly adopted plans, missing participant guidance, and a final update to the Voluntary Fiduciary Correction Program that added two new self-correction features.

January also set the tone for what would become a defining theme of 2025: litigation. The U.S. Supreme Court heard arguments on the critical question of which party bears the burden of proof in ERISA fiduciary cases — an issue that has sharply divided lower courts. Meanwhile, a ruling in the closely watched American Airlines ESG case acknowledged a prudent fiduciary process, yet nonetheless found a duty-of-loyalty violation — an outcome that left many observers (including this one) puzzled.

February

February brought both regulatory personnel and legislative developments; Daniel Aronowitz was nominated to lead the Employee Benefits Security Administration (EBSA), while in Congress, the Retirement Fairness for Charities and Educational Institutions Act was reintroduced, once again seeking to allow 403(b) plans to invest in collective investment trusts — a proposal that had stalled in the prior Congress.

Litigation continued at a brisk pace. Multiple suits challenged the use of plan forfeitures to offset employer contributions, including one aimed at Charter Communication’s $7 billion 401(k) plan (and by Schlichter Bogard LLC). A federal judge in Texas reaffirmed the validity of the Labor Department’s ESG regulation (though most expected a different decision), while HP secured a defense victory in a forfeiture reallocation case — one that would ultimately draw further attention — and support — from the Labor Department.

March

In March, the Senate confirmed Lori Chavez-DeRemer as Secretary of Labor. On the litigation front, new claims were filed alleging fiduciary breaches in healthcare plan management at JP Morgan, while an amended complaint against Johnson & Johnson revived a previously dismissed action.

At the same time, one of a dozen cases challenging the selection of BlackRock LifePath target-date funds (Cisco) was dismissed — this time with prejudice. However, a federal judge rejected Clorox’s motion to dismiss a forfeiture reallocation suit (they had prevailed on their motion last November), keeping that line of cases alive.

April

April proved to be one of the most consequential litigation months of the year. A unanimous Supreme Court decision in the Cornell University case — widely anticipated to encourage additional ERISA litigation — did little to dampen that expectation. The month also featured a rare ERISA jury trial (yes, Schlichter Bogard LLC represented the plaintiffs), resulting in a nearly $39 million damages award against Pentegra, a multiple employer plan provider.

Elsewhere, fiduciary defendants prevailed in the first decision (Alcoa) involving pension risk transfer transactions, an area seeing record volumes, spurred by interest rate movements and a strong equity market.

May

While headlines focused on the One Big Beautiful Bill — a sweeping legislative package that largely bypassed retirement plans — May still brought movement on legislation permitting 403(b) plans to invest in CITs. Regulatory activity was comparatively quiet, with the IRS announcing a modest increase in 2026 HSA contribution limits.

Litigation, however, remained active. Although new forfeiture reallocation suits continued to be filed — by an expanding roster of law firms — several were dismissed, and one of the earliest cases was resolved through a cash settlement.

June

June marked a notable regulatory pivot when the Labor Department announced it would reconsider its ESG regulation and formally rescinded its prior cautionary guidance on cryptocurrency investments, restoring a neutral stance toward plan investment choices.

That same month brought significant litigation victories for fiduciaries. Wells Fargo and JP Morgan both succeeded in dismissing forfeiture reallocation suits, with the JP Morgan decision issued with prejudice. Other plan sponsors saw similar results, suggesting that early momentum in these cases was beginning to shift.

July

In July, the Labor Department issued guidance — and data — on pooled employer plans, raising as many questions as it answered. More notably, the Department filed an amicus brief supporting fiduciary defendants in the HP forfeiture case on appeal in the Ninth Circuit.

The month also saw a $48.5 million settlement in the Pentegra litigation following the earlier jury verdict, and a federal judge in Texas invalidated a key portion of the fiduciary rule governing rollovers — echoing a similar ruling from a Florida court. The IRS, meanwhile, offered modestly helpful guidance on reporting and withholding for uncashed distribution checks.

August

August delivered a long-anticipated executive order laying the groundwork for expanded consideration of private markets in retirement plans. The directive encompassed alternative investments broadly, including digital assets, real estate, and — somewhat unexpectedly — lifetime income solutions.

On the litigation front, Empower was sued over allegations that it misused participant data obtained as a recordkeeper to cross-sell managed account services, echoing claims brought the prior year against TIAA and Morningstar.

September

September’s headline development was the confirmation of Daniel Aronowitz as head of EBSA, achieved through a procedural change that enabled mass approvals. Close behind was the issuance of final IRS regulations implementing SECURE 2.0’s Roth catch-up requirement for higher-income participants. Although effective in 2027, the rules generated confusion regarding the statutory Roth mandate scheduled to begin Jan. 1, 2026.

The month also saw two substantial SEC enforcement actions against Vanguard and Empower, citing allegedly inadequate disclosures related to participant transitions into managed account programs. The long-running American Airlines ESG case concluded with no monetary damages, but with court-ordered governance changes and participant disclosures imposed on the plan.

October

A government shutdown slowed — but did not halt — regulatory and legislative activity in October, including the release of Social Security COLA figures.

Litigation developments were mixed. Several pension risk transfer cases were dismissed on the grounds that plaintiffs had not demonstrated immediate or imminent harm. Others, however, were permitted to proceed where courts found sufficient allegations of potential injury.

November

Following the end of the government shutdown, the IRS released its highly anticipated 2026 contribution and benefit limits, including the updated FICA wage threshold relevant to the Roth catch-up requirement.

Litigation remained active. Several forfeiture reallocation suits were dismissed, with at least one decision citing the Labor Department’s amicus brief in the HP appeal. At the same time, new cases continued to emerge, including one involving Humana. November also brought a lawsuit by a group of advisors alleging Labor Department interference in deferred compensation matters, along with a request for attorneys’ fees in the American Airlines ESG case.

December

The year closed decisively. In two separate amicus briefs, the Labor Department urged the Supreme Court to review major ERISA issues — one addressing the burden of proof in fiduciary litigation, the other defining what constitutes a meaningful benchmark. In both, the Department sided with fiduciaries, and in one expressly acknowledged a complete reversal of its prior position. The Department also abandoned its defense of the fiduciary rule in court, even as its regulatory agenda signaled a potential replacement proposal in mid-2026.

Just ahead of the holidays, a new wave of litigation emerged from the Schlichter Bogard LLC firm — this time targeting voluntary benefits — accident, critical illness, cancer, and hospital indemnity insurance — none of which are employer-subsidized. At the same time, another healthcare-related fiduciary suit against Johnson & Johnson was dismissed — and the Labor Department asked for some more time, ostensibly gearing up for another amicus brief, this one in a case involving Honeywell.

Legislatively, the House passed a bill permitting 403(b) plans to invest in collective investment trusts. Additional proposals included reintroduction of Rep. Richie Neal’s (D-Mass.) auto-IRA bill for workers without access to a workplace retirement plan, legislation aimed at raising the bar for ERISA lawsuits, a bill that would permit Roth IRA rollovers, and a measure to expand and simplify PLESAs (pension-linked emergency savings accounts).

What’s Next?

Looking back, the defining feature of 2025 may not be what changed, but what was tested; the resilience of the retirement system, the willingness of employers to continue sponsoring plans in the face of growing legal risk, the ability of courts and regulators to distinguish between genuine fiduciary failures and opportunistic claims untethered from participant harm.

As the calendar turns, there is little reason to expect fewer lawsuits, simpler rules, or quieter headlines. But if 2025 taught us anything, it is that the system continues to work — imperfectly, unevenly, and sometimes in spite of itself — because of the judgment and commitment of those who operate it — and those who support them in those efforts.

Preserving that system in the years ahead will require not more noise, but clearer rules, fairer enforcement, and a renewed respect for the difference between prudence and perfection.

On to 2026!

- Nevin E. Adams, JD