The latest DC landscape survey revealed that defined contribution plan decision-makers are generally satisfied with plan investments, particularly regarding asset class diversification, performance, and cost. However, there is a notable disconnect regarding alternative investments. Although decision-makers show interest in these investments, they are rarely included in core menus or professionally managed portfolios like target-date funds. The research suggests that expanding the range of available investments could enhance expected returns and improve retirement outcomes for participants.
Daniel Aronowitz, nominated by President Donald Trump to be the assistant secretary of labor overseeing the Employee Benefits Security Administration, testified before the U.S. Senate Committee on Health, Education, Labor, and Pensions, pledging to reduce litigation surrounding retirement benefits and to address issues affecting Employee Stock Ownership Plans. He criticized the current enforcement landscape, promising to eliminate prolonged investigations and "regulation by litigation." Aronowitz, an expert in fiduciary liability insurance and former president of Encore Fiduciary, emphasized his commitment to fair and efficient enforcement of benefit plan rules.
Daniel Aronowitz, President Trump's nominee to lead the DOL's Employee Benefits Security Administration, emphasized the need for significant changes within the agency during a June 5 confirmation hearing. He stated his intention to enhance regulatory clarity for retirement plan sponsors and described himself as an experienced turnaround manager with fiduciary expertise. Aronowitz expressed his commitment to improving EBSA's enforcement and providing clearer regulations on key fiduciary issues to unlock the full potential of America's employee benefits system, should he be confirmed by the Senate.
Fiduciary defendants have won a lawsuit (Steen v. Sonoco Products Company) that initially involved claims of excessive fees and later included allegations of fiduciary breaches related to forfeiture reallocations. The case concerned a retirement plan with over 12,000 participants and more than $1 billion in assets, which the plaintiffs claimed had the bargaining power to negotiate lower fees but instead paid excessive recordkeeping and administrative fees to Empower for similar services that could have been obtained more cheaply. Additionally, the plaintiffs contended that the plan's forfeited, unvested Company contributions were misused to lessen the Company's contribution obligations instead of being applied to administrative costs.
On May 22, 2025, the Ninth Circuit upheld a district court's decision that dismissed a class action lawsuit against Intel's defined contribution retirement plan fiduciaries regarding their investments in hedge funds and private equity. In the case of Anderson v. Intel Corporation Investment Policy Committee, the court agreed with the DOL that offering PE investments in 401k plans aligns with fiduciary duties under ERISA. This ruling serves as guidance for 401k fiduciaries considering PE options, highlighting the importance of providing thorough disclosures about investments to mitigate fiduciary liability. Additionally, the case emphasizes the necessity of using "meaningful benchmarks" for comparing the performance of investment options against similar funds with comparable risk profiles.
Fidelity Investments' recent analysis for Q1 2025 reveals that average balances in 401k, 403b, and IRA accounts dipped slightly during the quarter, largely due to market fluctuations. On a positive note, both employer and employee savings rates remained robust, with the total savings rate for 403b plans holding steady at 11.8% and the total savings rate for 401k plans rising to a new high of 14.3%.
The 2025 survey of the retirement landscape by Voya highlights a disparity in perceptions about retirement readiness among stakeholders involved with 401k plans. While retirement plan participants exhibit growing optimism about their preparedness for retirement, plan sponsors tend to overestimate this sentiment. Specifically, 91% of sponsors believe participants are "very" or "somewhat" prepared, whereas only 69% of participants share that view. In contrast, retirement plan advisors have a perspective more aligned with participants, with 70% perceiving them as "very" or "somewhat" prepared, a slight decrease from 71% in 2023.
Many participants in defined contribution retirement plans often neglect to designate a beneficiary to receive their remaining account balance after their death, despite efforts by plan sponsors and administrators to emphasize its importance. When a valid beneficiary designation is not in place, the plan's default beneficiary hierarchy is utilized. This also applies if designated beneficiaries do not survive the participant or if they refuse their interest in the account. This article discusses key considerations for plan sponsors concerning their plan's default beneficiary hierarchy.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
