Meijer is taking its fiduciary insurer to court, arguing a 401(k) forfeiture lawsuit shouldn't carry a $1 million retention - it should carry $100,000.
The Michigan-based retailer filed the action on May 18, 2026 in the US District Court for the Western District of Michigan, asking the court to settle a coverage spat with Hudson Insurance Company. According to the filing, Hudson has agreed to defend Meijer in an underlying ERISA class action - but only after applying the higher retention reserved for what the policy calls an "Excessive Fee Litigation Claim." Meijer says that label doesn't fit.
The retailer says it has already spent more than $100,000 defending the underlying case, which means the disagreement isn't academic. Whether Hudson's higher retention sticks decides who pays from here.
The underlying lawsuit, brought in August 2025 by participants in the Meijer 401(k) Retirement Plan I and Plan II, doesn't go after fees in the usual way. According to Meijer's filing, the participants accuse the company and its board of mishandling forfeitures from unvested accounts - using that money to offset employer contributions rather than to cut participant costs or pay plan expenses. Meijer says the participants explicitly steered clear of the classic excessive-fee playbook. The filing quotes their brief: "This case is not about vesting schedules, the legality of Meijer's matching formula, the reasonableness of administrative fees, or Meijer's settlor-level prerogative to amend its Plans … It is not a challenge to fee levels or any settlor-level decision."
That, Meijer argues, is the whole point. If the participants aren't challenging fee levels, the company says, the suit isn't an excessive-fee case - and Hudson shouldn't be able to treat it like one.
Hudson, through its program administrator Encore Fiduciary, sees it differently. Encore sent a reservation of rights letter on September 17, 2025, and Hudson reaffirmed its position on April 20, 2026, taking the view that the substance of the participants' allegations still amounts to a claim that the plans' administrative fees were excessive and unreasonable.
The endorsement at the heart of the fight defines an Excessive Fee Litigation Claim broadly, sweeping in any claim "based upon, arising from, in consequence of or in any way related, directly or indirectly, in part or in whole, to" excessive or unreasonable administrative, investment, provider or recordkeeping fees. How that wording gets read here is what makes the case worth watching.
For insurers, brokers and claims professionals, the dispute lands at a useful spot. Forfeiture-misallocation suits like the one against Meijer often sidestep traditional fee arguments, and how courts size them up against excessive-fee endorsements is the kind of question that tends to come up more than once.
There's been no ruling on the coverage question. The allegations in the filing have not been tested in court, Hudson has not yet responded, and no judge has weighed in. The underlying ERISA case, meanwhile, was dismissed in December and is now on appeal.
