No exact look-alike needed to challenge a company's investment lineup
A US appeals court revived a retirement-plan suit against Royal Caribbean, ruling workers don't always need a look-alike fund to prove a poor choice.
On August 17, 2026, the US Court of Appeals for the Eleventh Circuit revived a lawsuit accusing Royal Caribbean of larding its employee retirement plan with poor investments. The court reversed a judge who had thrown the case out before trial.
Here is why it matters to HR. When workers sue over bad plan investments, employers have often escaped early by arguing the workers can't prove imprudence without a near-identical fund to measure against. No look-alike, no case. The trial judge bought that argument. The appeals court rejected it, ruling that Employee Retirement Income Security Act- the law governing employee benefit plans - does not demand a matching comparison in every case. Sometimes, the court said, a fund is a questionable pick precisely because nothing else quite like it exists.
The practical effect: one of the cleaner ways to shut these suits down early just narrowed. More of them can now reach the stage where a committee's decisions get pulled apart in discovery.
And those decisions are the real exposure. The duty ERISA places on a plan sponsor is about process - prudently choosing and monitoring what sits on the investment menu. When a pick goes bad, courts look at how the committee got there: who was consulted, what was reviewed, whether anyone was watching performance over time.
This case shows what that scrutiny looks like. In 2014, Royal Caribbean's investment committee restructured the plan and swapped Vanguard target date funds - a common set-and-forget retirement option - for a series run by Russell. According to the lawsuit, the Russell funds never had more than 12 clients and had lost their two biggest clients the year before Royal Caribbean signed on. The court noted the funds went on to trail the ones they replaced, and the ones that later replaced them, by annual averages of 1.51% and 2.12%. Royal Caribbean dropped Russell in 2019.
Internal Russell emails quoted in the opinion showed the manager had picked up on the client's frustration; a 2017 message predicted Royal Caribbean might "think they have made a bad fiduciary decision."
One caution before anyone reads too much in: the court did not decide whether Royal Caribbean broke its duty. It sent the case back for the trial judge to weigh the full record. What changed is the bar workers must clear to get there - and for benefits teams, that is the part worth watching.
