Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—11th Cir.: Apples-to-apples comparisons not required to establish investment options were objectively imprudent, (Aug 18, 2026)

By Ronald Miller, J.D.

The important point is that the law imposes no mandate that a plaintiff prove objective imprudence through apples-to-apples comparator evidence.

A federal district court erred in granting summary judgment in favor of Royal Caribbean against an employee’s claim the employer breached its fiduciary duty under ERISA to prudently select investments for its employee retirement plan, the Eleventh Circuit determined. Specifically, the employee alleged that Royal Caribbean’s decision to replace Vanguard Target Date Funds with Russell Target Date Funds in the plan’s menu of investment options caused the class members’ losses because the investment was objectively imprudent. The district court reasoned that an ERISA plaintiff must identify comparator funds to establish objective imprudence through an “apples-to-apples” comparison. The appeals court explained that, “whether an investment is objectively imprudent must be assessed against the actions of a hypothetical prudent fiduciary with ‘like aims’” (Johnson v. Russell Investment Management, LLC, No. 25-10692 (11th Cir. Aug. 17, 2026)).

Investment options. A self-directed retirement plan provides a menu of investment options from which participants can choose to invest their funds. The investment menu is set by the plan’s sponsor—here, Royal Caribbean. Many plans, including the one in this case, offer target date funds, or TDFs, as an option.

A TDF is an investment vehicle that simplifies retirement planning by allowing investors to invest all their savings in a single diversified fund that changes its asset allocation over time based on a target retirement date, rather than actively managing many different investments across their portfolio. Consistent with investing best practices, TDFs adjust their asset allocation to become more conservative as the investor’s retirement date approaches.

Retirement plan restructure. In 2014, Royal Caribbean’s Investment Committee decided to restructure its employee retirement plan. A review committee selected Russell as one of its four finalists, even though it was not among the initial top four contenders.

Meanwhile, the Investment Committee added the Vanguard TDF to the plan portfolio and set the Vanguard TDF as “the Plan’s default fund.”

After Russell gave an in-person presentation to the Investment Committee, it subsequently replaced the Vanguard TDF series with the Russell TDF series. In September 2015, Royal Caribbean and Russell officially entered into an Investment Management Agreement.

Underperformance. The Russell TDFs never had more than 12 clients and had lost their two largest clients to the Vanguard TDFs in 2014, the year before Royal Caribbean’s decision to move from Vanguard to Russell. According to expert testimony, the Russell TDFs “had inferior characteristics with respect to the commonly used risk, return, and risk-adjusted return metrics.”

From 2015 to 2019, the Russell TDF underperformed the Vanguard TDF (which it replaced) and the American Funds TDF (which eventually replaced the Russell TDF). In April 2019, Royal Caribbean terminated Russell’s Investment Management Agreement. And in May 2019, the Investment Committee replaced the Russell TDF series with the American Funds TDF series.

Fiduciary standards. An employee who participated in the Russell TDF series sued Royal Caribbean and Russell for breaching “ERISA’s strict fiduciary standards.” She alleged that Royal Caribbean imprudently selected Russell as the plan’s investment manager, failed to monitor the plan’s investment menu and the Russell TDF series’ performance, and failed to monitor the Investment Committee.

Following discovery, Royal Caribbean and Russell both filed motions for summary judgment, which the district court granted. The district court reasoned that an ERISA plaintiff must identify comparator funds to establish objective imprudence through an “apples-to-apples’ comparison. The employee appealed.

While the appeal was pending, the employee and Russell reached a settlement and jointly moved for voluntary dismissal of the appeal, which the appeals court granted. Royal Caribbean and its Investment Committee are the only remaining defendants.

Loss causation. ERISA requires fiduciaries administering employee benefit plans to prudently investigate, choose, and monitor investments. In Pizarro v. Home Depot, Inc., 111 F.4th 1165 (11th Cir. 2024), the Eleventh Circuit addressed how a participant in a plan can prove a fiduciary breach under ERISA’s section 1109(a). In Pizarro, the appeals court held that to establish fiduciary liability, a plaintiff must demonstrate (1) procedural imprudence (i.e., “imprudent process”) and (2) loss causation (i.e., “resulting in an imprudent investment”).

In this case, the focus was on loss causation. Loss causation requires a plaintiff to prove that an investment was not “objectively prudent.” An investment is not objectively prudent when it falls “outside the ‘range of reasonable judgments a fiduciary may make based on her experience and expertise,’ such that a hypothetical prudent fiduciary in the same circumstances as the defendant, armed with the information that a proper evaluation would have yielded, would not (or could not) have made the same choice.”

ERISA plaintiffs often rely on comparisons to demonstrate objective imprudence by presenting evidence that a challenged investment was inferior to an alternative that a fiduciary could have chosen instead. The appeals court has explained that when assessing this kind of comparator evidence, “whether an investment is objectively imprudent must be assessed against the actions of a hypothetical prudent fiduciary with ‘like aims.’”

Comparator evidence. The parties disagreed about the role of this kind of comparator evidence. The employee argued that she need not provide comparator evidence to demonstrate objective imprudence, but she also argued that she had done so by comparing the Russell TDF funds to the funds they replaced, and the funds that ultimately replaced them. Royal Caribbean responded that comparator evidence was, in fact, required to establish objective imprudence and that the employee’s comparator evidence did not satisfy the requirement.

The appeals court agreed with the employee that a plaintiff is not necessarily required to identify a comparable investment to establish loss causation. The objective imprudence of an individual investment turns on whether it falls “outside the range of reasonable judgments a fiduciary may make based on her experience and expertise.”

Qualitative and quantitative judgments. Here, the appeals court affirmed the approach taken in Pizarro, in which it identified various types of evidence that can inform whether an investment falls “outside the range of reasonable judgments,” to assess its objective prudence, grouping them in qualitative and quantitative buckets.

Qualitatively, a factfinder may look to 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.” And, quantitatively, a factfinder may weigh the fund’s fees and performance relative to appropriate contemporaneous peers and benchmarks. The quantitative evaluation, though, may be applied only to “apples-to-apples comparison[s].”

The important point is that the law imposes no mandate that a plaintiff prove objective imprudence through apples-to-apples comparator evidence. So, even when a plaintiff lacks qualitative evidence, he may still establish loss causation by reference to a meaningful benchmark that demonstrates obvious underperformance. And he may still point to a fund’s widespread unpopularity and negative industry ratings as evidence of its objective imprudence.

Here, the appeals court made no determination about whether the record warranted summary judgment under the appropriate standard.

Accordingly, the decision of the district court was reversed and the matter remanded for further proceedings not inconsistent with this decision.

The case is No. 25-10692.

Judge: Brasher, A.

Attorneys: Brock Specht (Nichols Kaster) for Ann Johnson. David Michael Demaio (Ogletree Deakins) for Royal Caribbean Cruises Ltd.

Companies: Royal Caribbean Cruises Ltd.

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