Key Points

• The 11th Circuit held in Johnson that ERISA plaintiffs need not always identify an apples-to-apples comparator to establish objective imprudence, although quantitative investment comparisons require appropriately matched benchmarks.
• Plaintiffs may show objective imprudence through quantitative evidence comparing similar investments or qualitative evidence such as negative industry ratings, limited market adoption, and widespread unpopularity.
• Plan fiduciaries should monitor Johnson on remand and the Supreme Court’s pending Anderson v. Intel decision, which could clarify comparator requirements for ERISA 401(k) imprudence claims at different litigation stages.

The U.S. Court of Appeals for the 11th Circuit recently issued an important decision relevant to a number of cases brought under the Employee Retirement Income Security Act of 1974 (ERISA) where a plaintiff claims that one or more of the investments included in a 401(k) plan’s lineup of potential investments was or is imprudent.

The decision rendered on August 17, 2026 in Johnson v. Russell Investment Management, LLC, et al., involves the Royal Caribbean Cruises Ltd Retirement Savings Plan (the “Plan”). The plaintiff, who participated in the Plan during the relevant years, brought a putative class action complaint under ERISA claiming that the Company (as Plan Sponsor) imprudently switched the Plan’s Target Date Fund (TDF) offerings from Vanguard to Russell.

District Court’s Decision Reversed

After discovery, the defendants moved for summary judgment. The U.S. District Court for the Southern District of Florida granted the defendants’ summary judgment motion, concluding that the plaintiff was obligated to — but failed to submit — evidence that the Russell TDF was objectively imprudent compared to another TDF that had the same investment strategy and risk profile. On appeal, the 11th Circuit reversed and remanded the case back to the district court for further proceedings not inconsistent with its opinion — to enable the district court to consider the full record on the issue of objective imprudence.

While the 11th Circuit held that “an ERISA plaintiff need not identify an apples-to-apples comparison to establish objective imprudence in every case,” the court made clear that a “quantitative evaluation may be applied only to apples-to-apples comparisons.” The court explained that “even when a plaintiff lacks a proper apples-to-apples comparison, he may still point to a fund’s widespread unpopularity and negative industry ratings as evidence of its objective imprudence.”

Both Qualitative and Quantitative Evidence is Relevant

The court further explained that either qualitative or quantitative evidence can be used by a plaintiff to prove objective imprudence. If the plaintiff is attempting to prove objective imprudence through quantitative evidence (such as fees and performance relative to appropriate contemporaneous peers and benchmarks), such a quantitative evaluation “may be applied only to ‘apples-to-apples comparison[s]’ to control for differences across the investments’ risk profiles, strategies, asset allocations, and the like.” Significantly, the 11th Circuit acknowledged the differences in the investment risk profiles, strategies, and asset allocations between the Russell TDF and the cited comparators and the inherent difference between TDFs that use

‘[T]o’ glidepaths (i.e., assets are most conservatively allocated at the target date—the most conservative approach) [and] other TDFs employ[ing] “through” glidepaths (i.e., assets reach the most conservative allocation some period of years beyond the target date—a less conservative approach).

According to the 11th Circuit, however, objective imprudence may also be proven through qualitative evidence, including whether the fund was a “popular option[] offered by other employers’ plans of comparable size and complexity” and whether it “received positive ratings from industry analysts.” In the Johnson case, for example, there was evidence that, at about the time Royal Caribbean switched from Vanguard TDF to Russell TDF, Morningstar had given a similar Russell TDF a “negative” rating. The record also included evidence that the Russell TDFs never had more than 12 clients and had lost their two largest clients to the Vanguard TDFs the year before Royal Caribbean’s decision to move from Vanguard to Russell. In addition, the plaintiff’s expert testified that, at the time the decision was made to switch from Vanguard to Russell, the Russell TDFs “had inferior characteristics with respect to the commonly used risk, return, and risk-adjusted return metrics.”

In Determining Loss Causation, Context is Key

The court held that courts must conduct a context-specific inquiry considering both qualitative and quantitative evidence to determine “loss causation.” The standard remains whether a prudent fiduciary “with like aims” could have made the same choice. Critically, if a benchmark is constructed around a fund’s contested design choices, matching that benchmark does not resolve whether adopting that design was prudent in the first place.

On remand, the district court must determine whether the full record creates a triable issue of fact with respect to objective imprudence. It will be interesting to see what the district court does.

Potential Influence on Anderson v. Intel

Regardless, even though the 11th Circuit’s decision in Johnson involved a motion for summary judgment, the Johnson Court’s analysis may prove instructive to the Supreme Court in connection with its upcoming oral argument and decision in Anderson v. Intel Corporation Investment Policy Committee which deals with the issue of whether a proper comparator investment must be pled in order for an imprudence claim like this to survive a motion to dismiss.

In Anderson, the 9th Circuit required the plaintiff to allege a “meaningful benchmark” at the pleading stage. Thus, both the 9th and 11th circuits agree that quantitative comparisons require apples-to-apples benchmarks; Johnson, however, holds that objective imprudence can also be proven (and presumably pled) through the use of qualitative facts.

Plan fiduciaries should monitor both the Supreme Court’s decision in Anderson and the district court proceedings on remand in Johnson, as the interplay between these cases is likely to shape the landscape for ERISA imprudence claims across procedural stages.

For more information about this and other issues involving ERISA compliance and litigation, contact the authors Brian S. Cousin at bcousin@foxrothschild.com or José Jara at jjara@foxrothschild.com.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the authors and not necessarily this law firm or its clients.