Lawyers, Funds and Money

  I recently stumbled across a report that claimed a “Massive Gap Between Participant and Attorney Recoveries in ERISA Lawsuits.”

That wasn’t exactly news to me, though it was a handy quantification[i] of a subset of ERISA settlements to make the case that the per-participant recoveries in ERISA litigation pale in comparison to the 25%–33% “pay day” that the plaintiffs’ bar gets in cases where there is a settlement.

The report — by Davis & Harman — focused on 27 settlements in 2025 involving (only) underperformance and excessive fee cases. In producing their conclusion, they employed some math that was arguably a bit “squishy”[ii] — and the results are all over the board — but you didn’t need to rely on that to see — and appreciate — the huge gap between what wound up in the lawyers’ pockets versus participants.

The rationale is, of course, that class action suits can be expensive to mount and pursue. The attorneys take on these cases, investing their time, energy, and money for years (and in some cases, decades) with no offsetting compensation. And, of course, there was no tally for all the cases filed that wound up with no recovery to counterbalance that expense.

But — let’s face it — when there is a “payday” for plaintiffs’ attorneys, it nearly always dwarfs whatever recovery they win for individual participants, if only because the recovery (net of attorneys’ fees, their expenses, the compensation to named plaintiffs, and the expense of administering the recovery) gets spread among thousands, and sometimes tens of thousands, of participants[iii] (we’re nearly always talking about large plans, after all). 

Moreover, there are plenty of signs that certain firms are simply “in it” for the quick settlement “funded” by insurance money (the exhaustion of which likely incentivizes many a settlement). Little wonder that some of these firms begin their career with a personal injury focus.

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There’s an argument to be made (and, trust me, the plaintiffs’ bar makes it) that litigation — or perhaps more precisely fear of future/potential litigation — has led to any number of long-term positive outcomes for the system overall. We’re talking about lower fund expenses, special (less expensive) retirement share classes, widespread availability of collective investment trusts, a reduction in revenue-sharing practices, greater reliance on passive/index fund options, etc. And there’s merit in those outcomes, though I’d be hard-pressed to “credit” that as a goal or objective of the firms that brought litigation.

However, there is something to be said for the renewed “outside” perspective that litigation has brought to retirement plan design and administration; would the move toward less expensive fund options have occurred as rapidly as it did without all those excessive fee suits? Would we be questioning the efficacy of managed accounts? The unbridled use of participant data? Would we, even today, be reminding folks to look to their plan documents to make sure it aligns with their forfeiture reallocation procedures?

But then, there are also any number of (at least potentially) positive changes (retirement income, alternative investments, managed accounts, target-date funds as a default, and at one time even automatic enrollment) that have been held in abeyance for fear of being sued. And let’s face it — the pace of litigation has led to significantly higher insurance premiums for every retirement plan. That’s a price we all pay.[iv]

In fairness, the vast majority of retirement plans will never be confronted with a class action lawsuit — they are, quite simply, too small to attract the attention of even the greediest plaintiffs’ attorneys.

Frankly, I’ve always considered the fear of litigation to be a poor motivator of good behaviors, though there are lessons to be learned.

Litigation may grab headlines and enrich attorneys, but it’s not a retirement strategy. The real work — and the real value — comes from plan fiduciaries who understand their role, document their decisions, and act solely in participants’ best interests.

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That’s where — and how — participant outcomes are actually improved.

Not because of litigation — but in spite of it.

• Nevin E. Adams, JD

 

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[i] See Davis & Harman Survey Highlights Massive Gap Between Participant and Attorney Recoveries in ERISA Lawsuits – Davis & Harman LLP.

[ii] They compared the median of the average per-participant award to the average plaintiff’s attorney’s fees…focused only on excessive fee and underperformance suits settled in 2025.

[iii] The participant-plaintiffs named in the suits fare better, of course, with “awards” routinely coming in between $5,000 and $10,000 each, though their investment of time and reputation surely counts for something.

[iv] Settlement amounts, though not insignificant, can be just the tip of the iceberg when it comes to tallying up the cost of litigation. Rarely acknowledged is the cost in time and outside counsel required to defend against litigation, much less the enormous cost of discovery, depositions, etc., before you even get to trial. 

A Super Bowl 60 Portfolio Pick

 The Patriots and Seahawks have some Super Bowl history — and some think the outcome might have an impact on the stock market — not to mention your 401(k)! 

Yes, that’s what adherents of the so-called Super Bowl Indicator[i] would have you believe — based on a “theory” that when a team from the old National Football League wins the Super Bowl, the S&P 500 will rise, and when a team from the old American Football League prevails, stock prices will fall.

It’s a “theory” that has been found to be correct nearly 80% of the time — for roughly three-quarters of the 59 Super Bowls to date.

Not that it hasn’t been tackled short of the “goal” line…particularly in recent years.

Portfolio Prognostications

One need to look back no further than last year’s victory by the NFC/original NFL Philadelphia Eagles commanding victory over the AFC/original AFL Kansas City Chiefs to see a testament to this theory — as the S&P 500 closed up nearly 17% in 2025.

That said, you might recall the previous year’s victory by the (original AFL) Kansas City Chiefs — which, according to the Indicator, should have predicted a portfolio predicament for the S&P 500 —  but wound up with a 23% gain for the year. Or the year before that when those (same) Kansas City Chiefs prevailed over the (original NFL) 49ers — but the S&P 500 still rose 25%.

On the other hand, the year before that the victory by the (old NFL) Los Angeles Rams (over the old AFL) Cincinnati Bengals “should” have been a portent of good times, only to see the S&P 500 slump more than 19% — dare I say “sacked” for its biggest loss since 2008.

And while the previous year’s blow-out victory by the NFC’s Tampa Bay Buccaneers[ii] (over those same AFL Kansas City Chiefs) bolstered the premise behind the “theory,” the year before that the win by these same Kansas City Chiefs (who, despite a rough 2025, have become something of a regular in the big contest in recent years) over the then-NFC Champion San Francisco 49ers undermined its track record (or did your 401(k) miss that 18.4% rise in the S&P 500?).

Or how about the year before THAT when the AFC’s New England Patriots (who once upon a time were the AFL’s Boston Patriots) bested the NFC champion Los Angeles Rams — but the S&P 500 was up more than 30% that year (2019).

And then there was the year before that when a win by the (old NFL and) NFC champion Philadelphia Eagles against the AFC Champion Patriots turned out to be a loser, marketwise, with the S&P 500 down more than 6% (though for most of the year it was quite a different story). Ditto the year before, when the epic comeback by those same AFC Champion Patriots against the then-NFC champion Atlanta Falcons failed to forestall a 2017 market surge.

Now, one might think that the real “spoiler” to this market “theory” is the New England Patriots (who not so long ago were perennial Super Bowl participants — and are, of course, back this year, albeit under new “management”) — but the year before that, the AFC’s (and original AFL) Broncos’ 24-10 victory over the Carolina Panthers, who represented the NFC, also proved to be an “exception.” 

Market Makings

Indeed, one might well wonder why, in view of that consistent string of “exceptions” that we’re still talking about this “theory” — but, as it turns out, that’s an unusual (albeit consistent) break in the streak that was sustained in 2015 following Super Bowl XLIX, when the AFC’s New England Patriots (yes, they DO show up a lot — though it’s been a while) bested the Seattle Seahawks[iii] 28-24 to earn their (at the time) fourth Super Bowl title. Yes, those same Seattle Seahawks that will face those (same) New England Patriots on Sunday.

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It also “worked” in 2014, when the Seahawks bumped off the legacy AFL Denver Broncos, and in 2013, when a dramatic fourth-quarter comeback rescued a victory by the Baltimore Ravens — who, though representing the AFC, are technically a legacy NFL team via their Cleveland Browns roots (this is where things start to get confusing, as the Ravens, who were the Browns moved to Baltimore in 1995 (though the NFL still views them as an expansion team) filling the hole left by the then-Baltimore Colts’ 1984 “dead of night” move to Indianapolis.

Admittedly, the fact that the markets fared well in 2013 was hardly a true test of the Super Bowl Theory since, as it turned out, both teams in Super Bowl XLVII — those Ravens and the San Francisco 49ers (yes, they show up a lot also — they just miss Joe Montana) — were, technically, NFL legacy teams.

However, consider that in 2012 a team from the old NFL (the New York Giants) took on — and took down — one from the old AFL (the New England Patriots — yes, those New England Patriots… again). And, in fact, 2012 was a pretty good year for stocks (and people who like to see the Patriots lose in dramatic fashion).

Steel ‘Curtains’?

On the other hand, the year before that, the Pittsburgh Steelers (representing the American Football Conference, but an old NFL team) took on the National Football Conference’s Green Bay Packers —two teams that had some of the oldest, deepest and, yes, most “storied” NFL roots, with the Steelers formed in 1933 (as the Pittsburgh Pirates) and the Packers founded in 1919.

According to the Super Bowl Theory, 2011 should have been a good year for stocks (because, regardless of who won, a legacy NFL team would prevail). But as some may recall, while the Dow gained ground for the year, the S&P 500 was, well, flat (dare we say “deflated”?).

And then there was the string of Super Bowls where the contests were all between legacy NFL teams (thus, no matter who won, the markets should have risen):

• 2006, when the Steelers bested the Seattle Seahawks (yes, they’ve been here more than you might appreciate — unless you’re a Seahawks fan, anyway).
• 2007, when the Indianapolis Colts (those old Baltimore Colts) beat the Chicago Bears 29-17.
• 2009, when the Pittsburgh Steelers took on the Arizona Cardinals (who had once been the NFL’s St. Louis Cardinals); and
• 2010, when the New Orleans Saints bested the Indianapolis Colts, who, as we’ve already remarked, had roots dating back to the NFL legacy Baltimore Colts.

Sure enough, the markets were higher in each of those years.

As for 2008? Well, that was the year that the NFC’s New York Giants upended the hopes of the AFL-legacy Patriots (yes, those Patriots, and yes, those New York Giants) for a perfect season, but it didn’t do any favors for the stock market. In fact, that was the last time that the Super Bowl Theory didn’t “work” (well, until last year, the year before last — oh, and the year before that — and the year before…).

Patriot Gains

Times were better for Patriots fans in 2005, when they bested the NFC’s Philadelphia Eagles 24-21. Indeed, according to the Super Bowl Theory, the markets should have been down that year—but the S&P 500 rose – albeit just 2.55%.

Of course, Super Bowl Theory proponents would tell you that the 2002 win by the New England Patriots accurately foretold the continuation of the bear market into a third year (at the time, the first accurate result in five years). But the Patriots’ 2004 Super Bowl win against the Carolina Panthers (the one that probably nobody except Patriots fans and disappointed Panthers advocates remember because it was overshadowed by the infamous “wardrobe malfunction”) failed to anticipate a fall rally that helped push the S&P 500 to a near 9% gain that year, “sacking” the indicator for another loss (couldn’t resist).

Bronco ‘Busters’

Consider also that, despite victories by the AFL-legacy Denver Broncos in 1998 and 1999, the S&P 500 continued its winning ways, while victories by the NFL-legacy St. Louis (by way of Los Angeles) Rams (that have since returned to the City of Angels) and the Baltimore Ravens (those former “Browns”) did nothing to dispel the bear markets of 2000 and 2001, respectively.

In fact, the Super Bowl Theory “worked” 28 times between 1967 and 1997, then went 0-4 between 1998 and 2001, only to get back on track from 2002 on.

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Indeed, the Buccaneers’ move to the NFC was part of a swap with the Seattle Seahawks, who did, in fact, enter the NFL as an NFC team in 1976 but shuttled quickly over to the AFC (where they remained through 2001) before returning to the NFC.[2] And, not having entered the league until 1976, regardless of when they began, can the Seahawks truly be considered a “legacy” NFL squad?

Bear in mind as well, that in 2006, when the Seahawks (what did I tell you?) made their first Super Bowl appearance — and lost — the S&P 500 gained nearly 16%.

Some Fun Facts to Share About the Game

This is the first time the Super Bowl has ever been played on February 8. It’s a rematch of Super Bowl XLIX. Super Bowl rematches are uncommon — this will be the 10th such pairing where the same two teams have met in the big game before. Historically, rematch teams have won back-to-back about two-thirds of the time.

The New England Patriots have chosen to wear all-white uniforms — white jerseys and white pants — for the game. They had the choice as the designated home team and opted for the white combo, in which they’re undefeated this season. The Seattle Seahawks will wear their navy-blue jerseys and navy-blue pants, continuing the look they wore in their playoff wins. Which means this matchup will feature an especially striking all-white vs. all-navy contrast — something rare in Super Bowl history and highly visual for TV broadcasts.

Through the first 59 Super Bowls (up to SB LIX), the white-jersey team has won roughly ~65–70% of the time. Notwithstanding that trend, the Seahawks are (currently) favored to win.

Overall, and particularly in view of the exciting playoff games that have led up to it, it looks like it should be a good game. And that — whether you are a proponent of the Super Bowl Theory or not—would be one in which regardless of which team wins, we all do!

- Nevin E. Adams, JD

 

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[i] An alternate theory linking the Super Bowl to stock market performance in reverse fashion postulates that Wall Street’s results can be used to predict the outcome of the game. According to this theory, if the Dow rises from the end of November until Super Bowl game day, the team whose full name appears later in the alphabet will win. Some people have too much time on their hands…

[ii] “Purists” still dispute how to interpret Tampa Bay’s 2003 victory, since the Buccaneers spent their first NFL season in the AFC before moving to the NFC.

[iii] As an interesting side note, Seattle is the only team to have played in both the AFC and NFC Championship Games, having relocated from the AFC to the NFC during league realignment prior to the 2002 season. The Seahawks are the only NFL team to switch conferences twice in the post-merger era. The franchise began play in 1976 in the NFC West division but switched conferences with the Buccaneers after one season and joined the AFC West.

Marking Time — When Retirement Milestones Become Personal

  There’s something about a birthday that ends in zero that hits differently. And I have one of those this week.

I’ve spent more than half my professional life thinking, writing, and talking about retirement — how people get there, how they prepare (or don’t), and what it all means when work finally loosens its grip.

And yet, when you hit a milestone like this, “theory” gets very personal very fast.

Truthfully, this isn’t what I thought “this” would feel like. Not dread. Not triumph. Just … different. Though lately, I’ve been thinking about it more than I expected.

See, it’s not just another candle (you’d have to forewarn the local fire department). It’s a checkpoint. A round number that invites reflection whether you ask for it or not. Sure, it’s just another year. But it’s a whole other category of living.

That said — and I’m happy to be able to say this — I don’t “feel” my age.[i] Or what I thought it would be like to be this age.

What I am starting to feel — though only recently, and doubtless due to the approaching anniversary of my birth — is an appreciation of how I spend my time. 

No longer bound by office start and stop times, the “rigor” of commutes, the (seemingly) endless pattern of meetings and conference calls — time, and the opportunity to see and do “other” things beckons. 

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You start to notice how you spend time, and who you spend it with. You’re more aware of what drains you — and what gives energy back. You get better (though it’s still a work in progress) at saying “no,” not because you’re tired, but because you’ve learned that every “yes” displaces something else.

There are a fair number of age markers in our business; age 50 for catch-ups, 59 ½ for penalty-free withdrawals,[ii] 62 for early Social Security withdrawals, 65 (as adjusted) for retirement/Social Security, and age 73 or 75 for RMDs (depending on your age). We’ve even recently added some others (ages 60-63) for “super” catchups. And let’s not forget the implicit retirement age “marker” associated with target-date fund selection. 

These markers give us an opportunity — an “excuse,” if you will, to engage with individuals along the way to help them consider different, and perhaps better, ways of financial preparation. Their advantage is you don’t need anything more than a calendar to anticipate and track them. Their limitation is that many arrive too late for truly meaningful course corrections — when time, compounding, and flexibility are already constrained.

If there’s a lesson in those age-based milestones, it’s this: milestones matter, but they don’t have to define you. They’re prompts, not verdicts. Invitations to take stock, adjust course, and — if you’re lucky — keep doing meaningful work with people you respect — and for people that need your support.

Because if you’ve learned nothing else by the time you reach a birthday that ends in zero, remember that the future is never guaranteed — and the time to make change — is finite.

• Nevin E. Adams, JD

 

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[i] Some of you, surely, are thinking to yourself “and you sure don’t act it, either!”

[ii] I’m cognizant of the rule of 55, though I suspect many aren’t.

‘Might’ Makes . . . Right?

  Words are funny things. They can entertain, elucidate, inform — and yes, sometimes mislead.

It is, of course, one of the reasons that I have long sought to see the actual questions asked in surveys that purport to convey opinions, not to mention the actual data/results behind those assertions, which can hide behind other malleable labels like “some,” “many,” or even “most.” They can also be a result of what I’ll term “malleable” opinion/assessment labels, such as “might” or “somewhat” or “it depends.”   

For example, a recent survey claiming that participants[i] were enthusiastic about gaining access to private markets contained the following statement: "Many believe private markets can provide potential growth and diversification in their portfolios…"

However, in this case (looking at the actual findings) “many” appears to be…36%.[ii]

The report continues to explain that “…while others are interested but want more information… here the number actually is half — 50%. Though neither of those numbers appear in the sentence that conveys those sentiments. Mind you, the numbers aren’t tucked away in an obscure footnote (as some do). But the coverage of those findings — certainly those that just scrape the press release — carry a message that, to my eyes, anyway, puts a positive “spin” on the actual conclusion(s).

Now, I’ve commented previously on the likelihood that “regular” participants (much less plan fiduciaries) are really up to speed on what’s involved in these markets.[iii] The survey got into this a bit, finding that a plurality — 43% — self-classified into a category labeled “somewhat[iv] familiar, understand them a little bit.” But then the report lumps that in with the 29% who claimed to be “very familiar, understand them very well” to create an assertion that 72% “are at least somewhat familiar.” Which, of course, is technically speaking an accurate statement…

But then, apparently building on that grouping (those now determined to be at least somewhat familiar), that same report comments that while “Most participants are familiar with private market investments but many still mix up terminology or lack solid understanding.” Which might well mean that while “most” claim to be familiar — and let’s remember how we got to that result — even though they actually…aren’t (remembering how many said they understood these “a little bit”).

The report then focused on what were termed “moderate” investors — which comprised nearly two-thirds (63%) of the sample, and when asked if they believed private markets should be part of a long-term retirement portfolio — more than half (55%) said “possibly” — depending on risk and cost factors. But then that was “transformed” along with another grouping (31% who simply said “yes” to the question) to be characterized as “a combined 86% said they are either “definitely interested” or “maybe interested” — a level of interest the report characterized as “encouraging for plan sponsors who are considering adding private investments.” Once again, the statement on which the conclusion is based is, admittedly, technically accurate.

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In fairness, those “malleable” descriptors provide just enough squishiness to allow pretty much anyone to infer levels of interest and/or acceptance to those who are inclined to see them. And let’s face it, we human beings are inclined to see what we want to see in pretty much any area of life.

Regardless, it should remind us all again of the importance of looking deeper than the summaries and press releases — not to mention the click-baiting headlines and hurriedly crafted news reports from those materials — to understand what the actual data — regardless of source[v] — is actually telling us.

And those looking to forecast future behaviors (or regulatory changes) might want to keep in mind that “might”…might also mean “might not.”

• Nevin E. Adams, JD

 

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[i] I’ll acknowledge right off the bat that this seems to be an engaged group of participants — 26% self-identified as “do-it-myself” investors, and another 72% said they wanted at least some level of involvement in how their retirement plan savings was invested. That could certainly explain some of the results.

[ii] A dictionary definition suggests that “many” is consisting of or amounting to a large but indefinite number.

[iii] See Talking Points: (Just Because) Survey Says?

[iv] Italics mine.

[v] This report happens to originate from a provider with an interest in private market adoption.

Who Wants Financial Wellness?

You might have missed it (I nearly did), but January has been declared “National Financial Wellness Month.”

The designation (apparently, it’s been so designated since 2011 or thereabouts) is meant to create a time where we’re all encouraged to pay closer attention to our financial well-being. Which, considering that we’ve just emerged from a season of what for many is one of “overspending,” January seems either a good time — or perhaps two months too late.

Seriously, while the numbers are modest, surveys (conducted primarily by those promoting or supported by promoters of those services) routinely show that some workers want[i] —  and even expect —  financial wellness type support from their employers. Not surprisingly, there are employers willing to accommodate this assumption, though —  depending on employer size, location, and source —  fewer than half do, with larger employers notably more likely to do so. And that’s with a truly fluid definition of what those services actually entail.

But do these programs actually work? The data —  and measurement —  is murky, to say the least.

The challenge starts with the fluid definition of what constitutes a financial wellness “program,” is further muddied by varying degrees of employer support, and ultimately compounded by (widely) varying means of measuring “success.” 

A recent survey by the Employee Benefit Research Institute (EBRI) found that the top factor in measuring the success of financial wellness initiatives was improved overall worker satisfaction, followed by increased employee productivity —  areas that might well benefit from financial wellness initiatives but are arguably influenced by a wider range of factors. 

Meanwhile, bottom-line measures such as reducing health care claims and costs were NOT commonly cited as top factors in measuring the success of financial wellness initiatives.

Little wonder that any kind of quantifiable ROI remains…elusive[ii].

But another —  and perhaps larger —  challenge remains: utilization. Transamerica recently reported that a consortium of industry experts[iii] only expects utilization by a third of individuals with access to those programs – despite their decades-long existence.  And that’s a future projection, supported by AI chatbots and the like in addition to human support.

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Indeed, despite the headlines proclaiming interest — it doesn’t take much effort to see that the surveys are finding an INCREASE in (modest) interest, rather than a commanding demand.

More’s the pity since there’s any number of signs that suggest American workers really need (if not want) the kind of financial guidance and help that these programs ostensibly could provide —  and not much sign that they’re inclined to seek it outside of the workplace[iv].

So, who wants financial wellness —  well, it’s hard to imagine someone who doesn’t, though they might not recognize it by that label or appreciate what it means.

Here’s hoping that THIS financial wellness month we’re able to help more folks both know about, and take advantage of, the available programs —  that we do a better job of defining what those programs are and can mean — and that the combination leads to more and better financial security for working Americans.

-          Nevin E. Adams, JD

 

[i] According to Bank of America’s 2025 Workplace Benefits Report (PDF), conducted in partnership with Bank of America Institute, 26% of the workforce is seeking help in areas such as emergency savings, paying down debt, and overall financial wellness, compared to 13% in 2023.  

[ii] But for what I still maintain is an interesting exercise, check out Building a Bottom Line on Financial Wellness.

[iii] Full disclosure – I’m among this group.

[iv] Setting aside the obvious concerns of the kind of help they might stumble into on their own.