What Is the Cunningham v. Cornell Case and Why It Matters?

In April 2025, the U.S. Supreme Court issued a landmark decision in the case of Cunningham v. Cornell University. The Court’s opinion has sent ripples through the retirement plan industry, fundamentally changing how courts interpret fiduciary responsibility under the Employee Retirement Income Security Act (ERISA). The ruling clarified that a plaintiff does not need to allege in their complaint that a plan fee was excessive—just that the plan paid a fee to a “party in interest.”

Why does this matter? It lowers the bar for lawsuits against employers and plan fiduciaries. Companies that manage 401(k) or 403(b) plans and pay fees to third-party vendors (such as recordkeepers, investment advisers, or administrators) could face legal scrutiny—even if the fees were reasonable. The burden is now on employers to prove, during litigation, that the fees met ERISA’s exemption requirements.

This ruling empowers employees, retirees, and even former plan participants to hold employers accountable for lapses in fiduciary duty. It also underscores the need for rigorous documentation, fee benchmarking, and transparent vendor selection processes.

For companies, this means higher legal risk and more cases surviving early dismissal stages. For employees, it signals greater oversight and accountability from those managing their retirement savings.