House Bill Proposes Litigation Reform

Representative Randy Fine (R-FL) has introduced H.R. 6084, the ERISA Litigation Reform Act. In a press release, Congressman Fine emphasized that this legislation strengthens retirement plan governance, reduces unnecessary legal costs, and protects the millions of workers who rely on employer-sponsored plans for their financial future.

The bill proposes changes to ERISA Section 502, making it the plaintiff's responsibility to reasonably allege and prove that a transaction is not exempt under ERISA Section 408(b)(2). For civil actions claiming a violation of ERISA Section 406 regarding the purchase or sale of qualified employer securities, the plaintiff must also plausibly allege and prove that the transaction is not exempt under ERISA 408(e). Additionally, when a court case involves a plan or its managers, all evidence collection and legal proceedings must pause while certain motions are under review, unless the court determines that specific evidence must be gathered to prevent its loss or avoid unfair harm. During this pause, all parties must preserve relevant documents and data as if they have been formally requested, even if no official request has been made. This requirement covers all documents held by the plan or party, including those maintained by recordkeepers.

The bill has been referred to the House Committee on Education and the Workforce, and its Subcommittee on Health, Education, Labor, and Pensions has scheduled a hearing titled “Pension Predators: Stopping Class Action Abuse Against Workers' Retirement” to take place on December 2.