The Eleventh Circuit reversed the district court’s grant of summary judgment to Royal Caribbean and remanded an ERISA class action challenging target-date funds offered in the Royal Caribbean Cruises Ltd. Retirement Savings Plan.

In a decision filed on August 17, 2026, the Eleventh Circuit Court of Appeals held that a retirement-plan participant does not always need an identical, “apples-to-apples” investment comparison to show that a challenged investment was objectively imprudent. The decision may be significant for 401(k) participants concerned about target-date fund fees, performance, risk, asset allocation, or fiduciary monitoring.

The decision did not find that Royal Caribbean breached ERISA or that the Russell target-date funds were imprudent. The court expressly made no determination about whether summary judgment is warranted under the correct standard and remanded the case for further proceedings.

What Did the Eleventh Circuit Decide?

Ann Johnson (“Johnson”), representing a certified class of similarly situated participants, alleged that Royal Caribbean breached ERISA’s duty of prudence in connection with Russell target-date funds added to the plan. The plan replaced Vanguard target-date funds with Russell funds in 2015 and replaced the Russell funds with American Funds target-date funds in 2019.

Johnson pointed to several categories of evidence. According to the appellate record, the Russell funds had relatively few clients, and an allegedly similar Russell retail target-date series had received a negative Morningstar rating. Johnson also relied on evidence concerning the funds’ fees, performance, glide path, asset allocation, and internal communications about performance and cost.

Royal Caribbean responded that the Vanguard and American Funds target-date series were not suitable apples-to-apples comparisons, because the funds used different strategies, glide paths, asset allocations, and risk profiles.

The Eleventh Circuit did not decide which side was correct. It held that the district court should consider the full record rather than requiring an identical comparator and excluding the other evidence.

Why the Decision Matters

The district court treated an apples-to-apples comparator as mandatory and declined to consider other evidence of alleged objective imprudence. The Eleventh Circuit rejected that approach.

The appellate court explained that a participant may use appropriate comparisons, but an identical comparator is not required in every case. Qualitative evidence—such as industry ratings or whether comparable plans widely use a fund—may also be relevant. When a participant relies on quantitative comparisons of fees or performance, however, the analysis must account for differences in risk, strategy, asset allocation, and investment objectives.

What Should 401(k) Participants Review?

Target-date funds with the same retirement year can have materially different fees, risks, holdings, and glide paths.

Participants with concerns may want to review:

• Annual fee disclosures, quarterly account statements, and the plan’s investment comparison chart;
• The target-date fund’s expense ratio, underlying-fund fees, glide path, and asset allocation;
• Performance against an appropriate benchmark over a meaningful period; and
• Notices showing when the plan added, removed, or replaced investment options or managers.

Questions About Your Retirement Plan?

Investment losses or underperformance alone do not establish an ERISA violation. Questions may arise, however, when substantial retirement savings were allegedly affected by excessive fees, imprudent investments, inadequate monitoring, conflicts of interest, missing contributions, incorrect benefit calculations, or denied benefits.

Kehoe Law Firm, P.C. reviews potential claims involving 401(k), 403(b), pension, and other employee benefit plans. Participants and beneficiaries may submit a confidential inquiry at no cost or obligation.

Contact Kehoe Law Firm, P.C. 

Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

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