Daily Article Digest - Updated Regularly

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403b and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

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Plaintiffs Appeal 401k Forfeiture Case Against Honeywell

A federal district court dismissed a 401k-plan forfeiture complaint against Honeywell International for the second time, leading the plaintiffs to appeal the decision to the U.S. 3rd Circuit Court of Appeals. The amended complaint was dismissed with prejudice on August 18, meaning it could not be further amended. In the dismissal, the court noted that the plaintiffs had not established that Honeywell breached its fiduciary duties, as participants did not experience reduced contributions due to the use of plan forfeitures. The appeal was filed the following day, on August 19.

Source: Planadviser.com, August 2025

Empower Accused of Pushing Excessive Costs, Underperforming Investments

Three participants from separate defined contribution plans have filed a lawsuit in the U.S. District Court for the District of New Jersey against Empower Advisory Group LLC and its affiliates. The complaint alleges that Empower misled retirement plan participants into transferring their savings into high-fee investment products, violating fiduciary duties outlined in ERISA. The participants named in the complaint are Shakira Williams-Linzey from the Central Jersey Family Health Consortium 403b Pension Plan, Jennifer Patton from the Heliogen Inc. 401k Plan, and Kathleen McFarland from the Global Medical Response, Inc. 401k Plan. The lawsuit claims that Empower and its related companies engaged in prohibited transactions through their actions.

Source: Planadviser.com, August 2025

Settlement Struck in 403b Excessive Fee Suit

After five years of litigation, Kaila Gonzalez, a participant in the $5.6 billion Northwell Health 403b Plan, has reached a settlement in her excessive fee lawsuit against Northwell Health, Inc., the Northwell Health 403b Plan Committee, and 10 unidentified fiduciaries. Gonzalez filed the lawsuit in 2020, claiming that the defendants permitted excessive recordkeeping fees and imprudently retained certain investment options in violation of ERISA.

Source: Napa-net.org, August 2025

Coming Soon to Your 401k Plan: Tontines and Other Exotic Investments

Participants in 401k and other DC retirement plans may soon have access to high-risk, potentially high-return investments following President Trump's Executive Order 14330, issued on August 7, 2025. This order aims to "democratize" investment opportunities and directs the Secretary of Labor to clarify guidelines on alternative assets and the fiduciary processes for offering such investments under ERISA. There is debate about the suitability of alternative assets for 401k and defined contribution plans. Nevertheless, investment fiduciaries must prioritize the prudent evaluation and documentation of these assets when considering them for participants in ERISA-governed retirement plans.

Source: Verrill-law.com, August 2025

Watch Out for These Six Retirement Myths

Getting ready for retirement can be overwhelming, especially with the sheer volume of information out there. It can be challenging to determine whose guidance to trust and which strategies will effectively support your financial objectives. This overload of information may even hinder your progress and reduce your retirement savings. Don't allow these six prevalent myths to divert you from achieving a successful retirement.

Source: Savantwealth.com, August 2025

DOL Sheds Light on the Fiduciary Responsibilities That Arise With Pooled Employer Plans PEPs

On July 28, 2025, the DOL released new guidance regarding pooled employer plans and the fiduciary responsibilities employers hold when participating in them. The guidance emphasizes that while PEPs can transfer some ERISA fiduciary liability risks to a pooled plan provider, employers must still prudently select and monitor these providers. The DOL's request for information seeks insights on market practices to consider establishing a safe harbor to encourage greater adoption of PEPs, which were introduced by the SECURE Act of 2019. This guidance aims to enhance employer understanding of evaluating PEPs and may lead to increased innovation in the investment options offered.

Source: Ropesgray.com, August 2025

Implications of Demographic Shifts for Retirement Plan Sponsors

Diana Schneider from Massachusetts Mutual Life Insurance Company discusses how shifting demographics in the U.S. are impacting retirement planning and the role of plan sponsors. She notes that increasing longevity and generational behavior changes are reshaping attitudes towards aging and careers. Schneider identifies three key implications for employers regarding these evolving retirement dynamics. These insights suggest that plan sponsors need to adapt their strategies to better support participants in retirement planning as the nature of retirement continues to change.

Source: Plansponsor.com, August 2025

Selecting Plan Features That Appeal to Younger Employees

Company culture and workplace benefits are evolving to meet the needs of younger generations in the workforce. To attract and retain young talent, companies must adapt their benefit programs, particularly in the area of company-sponsored retirement savings plans. Younger workers are increasingly reliant on their savings for financial security, rather than relying solely on Social Security. Additionally, they value features that address their specific needs, like student loan debt assistance, and investments that align with their social values. Recommendations are provided for benefits that would appeal to this demographic.

Source: Planpilot.com, August 2025

One Million Workers Have Saved $2 Billion in State Automated Retirement Savings Programs

Private sector workers in 12 states have collectively saved over $2 billion for retirement through state automated savings programs, often referred to as "auto-IRAs." These programs aim to assist workers without access to employer-sponsored retirement plans by automatically depositing a portion of their paychecks into individual retirement accounts managed by private firms under state supervision. Research indicates that automatic payroll deductions significantly boost retirement savings. However, over 56 million private sector workers in the U.S. still lack retirement benefits from their employers. Since Oregon launched the first state automated savings program in 2017, participation among savers and employers has increased significantly, along with the total assets saved.

Source: Pew.org, August 2025

DOL Begins to Act Under the New Executive Order Aimed to Increase Alternative Investments in Retirement Plans

The encouragement of non-traditional investments, such as Alternative Assets, in retirement plan accounts has fluctuated with different administrations. A recent Executive Order aims to broaden access to these investments by facilitating the rescission of a statement from the DOL issued in December 2021 under the Biden administration. This statement responded to earlier guidance on private equity investments from the Trump administration. The Supplemental Statement was rescinded on August 12, shortly after the EO was issued. Additionally, within 180 days of the Order, the Secretary is required to review DOL guidance on fiduciary duties under ERISA regarding the inclusion of Alternative Assets in asset allocation funds, with a deadline set for February 3, 2026.

Source: Pbwt.com, August 2025

Fiduciary Rule Litigation Delayed Again

The DOL has requested an additional 60 days to determine its next steps regarding a consolidated federal court case challenging the retirement security rule established under the Biden administration. This is the DOL's third request for an extended stay in the U.S. Court of Appeals for the Fifth Circuit. The motion, filed on August 14 by the Department of Justice, seeks to extend the timeline to October 14, 2025, and notes that the other parties involved in the litigation have consented to this request.

Source: Psca.org, August 2025

What's the Alternative(s)? Nevin Adams and Fred Riesch Podcast

On August 7, President Trump issued an executive order directing the DOL to reconsider barriers preventing defined contribution plans from accessing alternative investments. The order specifically calls for a reevaluation of the guidance on fiduciary duties related to alternative asset investments in ERISA-governed plans, such as 401ks and 403bs. This move is viewed as a push to encourage the inclusion of alternative assets in these retirement plans. In this podcast, Nevin & Fred check it out and the implications.

Source: Napa-net.org, August 2025

Schlichter Says Empower Improperly Used Data in 401k Managed Account Push

A new lawsuit filed by Schlichter Bogard LLC alleges that Empower Retirement and its affiliates misled retirement plan participants to boost corporate profits. The suit claims Empower exploited its role as a recordkeeper to identify rollover candidates, promoting their managed account product with hidden fees and limited customization options. It also criticizes plan sponsors for failing to supervise Empower's actions, despite them not being named as parties in the suit.

Source: Napa-net.org, August 2025

Court Rejects Testimony of Plaintiffs' Prudence Experts in 401k Litigation Bench Trial

The court ruled in favor of LabCorp, concluding that the plaintiffs did not demonstrate that LabCorp breached its fiduciary duty of prudence in managing recordkeeping fees and monitoring investment shares of the Plan. The decision was significantly influenced by the court's Daubert analysis of the parties' expert testimonies, which were deemed to have limited probative value. The court criticized the plaintiffs' experts for basing their conclusions on personal experiences rather than industry standards and for lacking familiarity with key documents related to their claims.

Source: Millerchevalier.com, August 2025

Implementing the Executive Order on Democratizing Access to Alternative Assets for 401k Investors

In this opinion piece, Paul Cellupica, General Counsel of the Investment Company Institute, discusses President Trump's executive order that directs the U.S. Secretary of Labor to reassess fiduciary guidelines concerning private market investments in 401k plans and other ERISA-defined contribution plans. The order also encourages the SEC to find ways to enhance access to alternative assets for plan participants. Cellupica views this as a significant advancement and expresses eagerness to collaborate with various government entities to implement these initiatives. He suggests that reforms utilizing funds regulated under the Investment Company Act of 1940, along with its associated investor protections, would be an ideal starting point.

Source: Ici.org, August 2025

Things I Worry About: Executive Orders, Private Funds, and Fiduciary Standards

This article by Fred Reish discusses the President's August 7 Executive Order aimed at expanding 401k investment options to include alternative assets. It clarifies common misconceptions about the Order, which instructs the Secretary of Labor to review current guidelines and determine their suitability for facilitating such investments. Additionally, the Order mandates the issuance of guidance to clarify fiduciary responsibilities related to 401k investments in alternative assets and to consider establishing a fiduciary safe harbor.

Source: Fredreish.com, August 2025

Best Practices for ERISA Plan Sponsors and Fiduciaries in a Changing World: Using Insurance Wisely

When a plan administrator chooses an insurer to offer annuities for a retirement plan governed by ERISA, this decision is considered a fiduciary act that must be carried out with prudence. Errors during this process can lead to substantial liability for the plan administrator and threaten the security of retirees. This article outlines how to utilize existing guidance and provides practical advice on how to properly document and defend your selection process.

Source: Bradley.com, August 2025

Best Practices for ERISA Plan Sponsors and Fiduciaries in a Changing World: Using Insurance Wisely

The significance of insuring liability risks for plan sponsors and fiduciaries managing benefit plans, especially 401k plans, has grown substantially in the wake of increased class action lawsuits targeting ERISA plan fiduciaries. It is crucial for plan sponsors to treat fiduciary liability insurance as a critical component of their risk management strategy, given the high costs associated with litigation and settlements in ERISA-related cases. Additionally, plan sponsors must proactively understand their insurance coverage to effectively leverage it to their advantage.

Source: Bostonerisalaw.com, August 2025

A Fiduciary's Next Steps After Trump's Executive Order Opening the 401k Door to Alternative Investments

On August 7, 2025, President Trump issued an Executive Order aimed at expanding access to alternative investments, like private equity, commodities, real estate, and some digital assets, for participants in 401k and other DC retirement plans. This initiative seeks to "democratize" investment opportunities that were previously available primarily to institutional and wealthy investors. However, while the order highlights new investment options, ERISA fiduciaries must proceed cautiously, as the Executive Order does not change their fiduciary responsibilities under ERISA. In light of recent Supreme Court rulings, fiduciaries are also advised to reconsider how much they can rely on agency guidance and regulations when selecting investment options for retirement plans.

Source: Benefitslawadvisor.com, August 2025

Scottsdale CEO Indicted for Embezzling From Retirement and Health Plans

James Vincent Campbell, CEO and founder of a company that manages employee benefits for federal contractors, was indicted for allegedly embezzling over $2.4 million from an ERISA benefit plan to finance exotic hunting trips in Africa and Alaska. He faces one charge of theft from an ERISA plan and 11 counts of money laundering. Campbell pleaded "not guilty" to the charges.

Source: 401kspecialistmag.com, August 2025

State Auto-IRAs Reach $2 Billion in Assets

Over one million workers have saved over $2 billion through state-run automatic individual retirement accounts, according to an analysis by the Pew Charitable Trusts. This significant growth in auto-IRA assets occurred faster than before, reaching $1 billion in six years and doubling to $2 billion in just 18 months. The increase is attributed to strong market performance, a 25% rise in saver accounts, and higher average savings rates as the programs mature, as noted by Kim Olson from Pew's retirement savings team.

Source: 401kspecialistmag.com, August 2025

Federal Judge Rejects Motion to Dismiss Stable Value Investment Case

A federal judge in Virginia has denied Sentara Healthcare Inc. and its fiduciary committee's motion to dismiss a lawsuit alleging breach of fiduciary duty regarding its 403b plan. The plaintiffs claim that the plan sponsor and committee failed to adequately monitor an underperforming stable value investment option. While one plaintiff, Bonny Davis, was initially found to lack standing because she was not a participant in the investment, the court permitted the plaintiffs to amend the complaint to demonstrate that she had, in fact, enrolled in the investment option, thus allowing her to establish standing in the case.

Source: Planadviser.com, August 2025*

District Court Denies Bank of America's Motion to Dismiss 401k Forfeitures Case

A federal judge in North Carolina has allowed a lawsuit against Bank of America to proceed, denying the bank's motion to dismiss the case. The lawsuit, filed by plaintiffs in August 2024 and amended in March, claims that Bank of America improperly utilized forfeited retirement plan assets to offset its contributions instead of paying plan expenses, which the plaintiffs argue violates fiduciary duties under ERISA. U.S. District Judge Max Cogburn Jr. stated that there have been varying judicial interpretations of what constitutes a fiduciary breach under ERISA and rejected the bank's claim that its actions fell outside ERISA's fiduciary standards.

Source: Planadviser.com, August 2025

IRS Guidance on Uncashed and Reissued Checks: An Opportunity to Review Payment Practices

The IRS issued Revenue Ruling 2025-15, which clarifies tax withholding and reporting obligations for stale and reissued retirement plan distribution checks. The ruling reaffirms that payors who have been following previous guidance (Revenue Ruling 2019-19) do not need to change their existing practices. It also states that payors cannot reverse required withholding or adjust notifications due to checks not being cashed. While the content was expected, the Ruling provides necessary clarity for payors and plan administrators by summarizing these principles in one release.

Source: Morganlewis.com, August 2025

Crypto, Private Equity, and Real Estate in Your 401k? Latest Executive Order Could Redefine Retirement Investing

On August 7, 2025, the U.S. administration issued an executive order aimed at modernizing retirement plan investment options. The order intends to expand access to alternative investments -- such as private equity, private credit, real estate, and digital assets like cryptocurrency -- within retirement plans governed by ERISA. It emphasizes the competitive returns and diversification benefits of these assets and urges federal regulators to take coordinated actions to facilitate their inclusion in 401k and other defined contribution plans. This move aligns with but extends beyond a 2020 Department of Labor Information Letter that indicated including private equity in retirement plans could be consistent with ERISA's fiduciary duties.

Source: Morganlewis.com, August 2025

IRS Issues Proposed Automatic Enrollment Guidance

The IRS recently released proposed guidance regarding the automatic enrollment requirements introduced by SECURE 2.0 for new 401k and 403b plans established after December 29, 2022. This guidance, referred to as "Mandatory Auto Enroll," mandates that employers automatically enroll employees at a minimum rate of 3% of their compensation, with annual increases of at least 1% up to a cap of 10%. Since the original legislation lacked detailed operational specifics, this IRS Guidance aims to clarify those details. However, it's important to note that the guidance is still in proposed form, and changes may occur before it is finalized.

Source: Legacyrsllc.com, August 2025

The New Priorities: Why Plan Sponsors Are Shifting Focus from Cost-Cutting to Cybersecurity and AI

The focus of 401k plan sponsors is shifting away from prioritizing cost reduction, which was previously their top concern. According to Escalent's 2025 Retirement Planscape report, only 40% of plan sponsors now list cutting expenses as a priority, down from 50% the previous year. Instead, concerns about cybersecurity and artificial intelligence have taken center stage, indicating a significant change in priorities driven by fear rather than cost.

Source: Jdsupra.com, August 2025

Executive Order Calls for More Access to Retirement Plan Alternative Asset Investment Options

President Trump signed an executive order titled "Democratizing Access for 401k Investors," aimed at improving access to alternative asset investments -- such as cryptocurrency, private equity, and real estate -- in 401k and other defined contribution plans. The order directs the U.S. Department of Labor to review existing guidance under ERISA concerning fiduciary duties related to these investments and to explore regulations that provide fiduciary "safe harbors" to reduce litigation risks. Plan sponsors and fiduciaries are advised to stay informed on regulatory updates and understand the options, risks, and benefits of alternative investments.

Source: Hklaw.com, August 2025

Things I Worry About: ESG and the Political Back-and-Forth at the DOL

This article highlights the ongoing political struggle between Republican and Democratic administrations regarding investment selection factors for retirement plans, such as economically targeted investments, socially responsible investments, and environmental, social, and governance criteria. Historically, this tug-of-war was expressed through sub-regulatory guidance, which reflected each administration's views but lacked legal authority. However, during the first Trump administration, a binding regulation was implemented that opposed ESG considerations. Despite these political maneuvers, Reish reminds fiduciaries that their primary responsibility remains to act in the best interests of retirement plan participants.

Source: Fredreish.com, August 2025

Three Things Prudent Plan Sponsors Must Understand About President Trump's Executive Order and Fiduciary Risk Management

The President has issued an executive order asking the DOL and other regulatory bodies to create guidelines that would permit 401k plans to include riskier investments like private equity and cryptocurrency. Critics argue that these alternative investments are unnecessary and too risky, contradicting the prudence requirements outlined in ERISA. The author suggests that prudent plan sponsors should disregard the executive order and focus on ensuring their plans remain compliant with ERISA standards.

Source: Fiduciaryinvestsense.com, August 2025

Supreme Court Shows Interest in ERISA Pleading Standard Circuit Split

Earlier this year, Parker-Hannifin, a defendant in an ERISA fiduciary breach case, filed a petition for a writ of certiorari to the U.S. Supreme Court. This petition could resolve a circuit split regarding the pleading standard for ERISA class actions that challenge the investment performance of defined contribution plans, highlighted by the Sixth Circuit's decision in Johnson v. Parker-Hannifin. The Seventh, Eighth, and Tenth Circuits require plaintiffs to allege that alternative, similarly positioned investment options outperformed those offered in the plan, a standard referred to as "meaningful benchmarks." The Sixth Circuit's ruling in Johnson deviates from this established consensus. If the Supreme Court agrees to hear the case, it could provide clarity on this important legal issue.

Source: Erisalitigationadvisor.com, August 2025

Trump Seeks to Encourage PE and Crypto 401k Plan Investments

President Trump's Order aims to promote access to alternative assets in 401k plans, marking a significant change from the previous administration. The potential for broader inclusion of these investments will hinge on agencies creating clear and certain fiduciary guidelines for plan fiduciaries. These guidelines must also withstand judicial scrutiny. Furthermore, alternative investment firms should evaluate the effects of 401k participant investments, which are protected under ERISA.

Source: Erisalitigation.com, August 2025

Growing Advisor Support for Private Market Investments in Retirement Plans: Survey

A recent survey by Empower reveals strong interest among financial advisors in incorporating private market investments, such as private equity, real estate, and credit, into defined contribution portfolios. The July 2025 survey found that 68% of advisors already use these investments, mostly in high-net-worth accounts. Notably, 58% of those who use private market investments would recommend them for retirement plans, a figure that rises to 75% among advisors serving pension plans. Overall, 43% of advisors show increasing interest in this area.

Source: Empower.com, August 2025

New Order Targets 401k Plan Alternatives: President Takes Aim at Legal Barriers and Litigation Risks

The Executive Order signed on August 7, 2025, is a significant step towards expanding access to private assets in 401k plans and reducing legal uncertainty for fiduciaries interested in including alternative investments. It is expected to be positively received by plan sponsors, fund sponsors, and participants looking for more investment options. Stakeholders will have opportunities to provide feedback on upcoming rulemaking and guidance. The Order's reference to "asset allocation" funds aligns with previous guidance and recent market trends, although it does not represent the only solution.

Source: Dechert.com, August 2025

Executive Order Clears Path for Alternative Assets in 401k Plans

On August 7, 2025, President Trump signed an Executive Order aimed at increasing access to alternative assets for 401k plan investors. While the Order allows the DOL to provide guidance on these matters, it is viewed as unlikely to fulfill the Order's objectives. A formal rule, which would involve a comprehensive notice-and-comment process and be subject to greater judicial scrutiny, would be more effective. As a result, plan fiduciaries would prefer a regulatory safe harbor over mere guidance to reduce liability concerns.

Source: Debevoise.com, August 2025

Plan Sponsor and Asset Manager Considerations Under 401k Alternatives Executive Order

On August 7, 2025, President Trump signed the executive order that aims to expand the availability of alternative investments, such as private equity and actively managed funds in digital assets, within 401k plans. Although alternative investments are not explicitly prohibited under ERISA, they have been largely overlooked in practice. The order emphasizes the administration's support for these investments but does not mandate the DOL to consider direct stand-alone alternative investments. Instead, it instructs the DOL to provide guidance on selecting funds that incorporate alternative assets. Plan sponsors and fiduciaries are advised to pay close attention to the executive order's specific language.

Source: Carltonfields.com, August 2025

The Trump Private Equity Order: What Plan Fiduciaries Need to Know Now

On August 7, 2025, the president issued an executive order aimed at expanding the types of holdings in 401k, 403b, and other defined contribution plans. This policy seeks to align the investment opportunities for participants in these plans with those in public and defined benefit plans by increasing access to alternative assets. The order emphasizes that while it allows for the offering of these investments, the existing ERISA fiduciary framework remains in place. It instructs the DOL, in collaboration with the Treasury and the SEC, to review and update prior guidance regarding these investments.

Source: Bsk.com, August 2025

Trump Administration Executive Order on Adding Private Equity Investments to 401k Plans

The Trump administration is increasingly pushing to incorporate private equity investments into 401k plans, a topic that has been discussed since at least last November but is now receiving heightened media attention. The author emphasizes that the recent executive order is just an initial move in a larger debate and should not be misinterpreted as the first step in a new process. Efforts to introduce such investments into retirement plans have been ongoing for a while, and the current developments are part of that longstanding discussion. The author provides resources for those looking to understand the issue better.

Source: Bostonerisalaw.com, August 2025

Workers Do Not Need Private Equity in their 401k Plans: Opinion

The president has issued an executive order to promote the inclusion of private equity, private credit, and other alternative investments in 401k plans, with the DOL responsible for implementation. There is speculation that such investments might be capped at 10% to 20% of target-date funds, which are the default options for most 401k plans. However, the author questions the necessity of this move, suggesting that the push for private equity is largely driven by the private-equity industry. The author points out that adding private equity has not improved returns or reduced volatility in state and local pension plans, highlighting the drawbacks of such investments.

Source: Bc.edu, August 2025

What Is a "Trump Account," and How Does it Impact Employers?

The so-called "One Beautiful Bill" has paved the way for the establishment and management of "Trump Accounts." These accounts feature both an individual component and the option for employer sponsorship. Although numerous questions about their administration and eligibility still linger, employers must grasp the fundamental aspects of Trump Accounts outlined here.

Source: Barran.com, August 2025

Social Security COLA Forecast Boosts Slightly to 2.7%

The forecast for the Social Security cost-of-living adjustment for 2026 has slightly increased to 2.7% as of July, reflecting ongoing high prices for items frequently purchased by seniors. With the official announcement approaching in two months, predictions have risen; The Seniors Citizen League initially estimated a 2.6% increase in June, while analyst Mary Johnson maintains her prediction at 2.7%.

Source: 401kspecialistmag.com, August 2025

DOL Decides to Keep Annuity Safe Harbor, Separate Account Rules

The DOL has decided not to eliminate its safe harbor guidance on selecting annuity providers for individual 401k plans after receiving significant negative feedback. Although EBSA previously argued that the guidance was unnecessary due to a 2019 amendment to ERISA that introduced a more streamlined fiduciary safe harbor, the backlash led them to maintain the existing regulations as part of their effort to minimize burdensome federal regulations.

Source: Psca.org, August 2025

Debt Weighs Heavy on Plan Sponsors, Employees

A comprehensive assessment of financial wellness must consider debt. Recently, a Texas federal judge approved the Trump administration's request to eliminate regulations from the Biden administration that aimed to remove $49 billion in medical debt from the credit reports of almost 15 million consumers. Additionally, interest on student loans resumed on August 1 for 7.7 million borrowers in the income-driven Saving on a Valuable Education Plan, following a ruling by the U.S. 8th Circuit Court of Appeals that struck down the program in April. "For employers, this isn't really just a credit issue," says Todd Lacey, president of Financial Finesse. "It's a wellness issue."

Source: Plansponsor.com, August 2025*

The Forfeiture Fiasco: Why the DOL and Common Sense are on the Right Side of the HP Case

It's rare to witness the DOL stepping into legal battles to support plan sponsors, but when it does, it usually signifies a more significant issue than just the complaint of an individual plan participant. This was the case in Hutchins v. HP, Inc., a lawsuit that has highlighted one of the longstanding and often misinterpreted practices in defined contribution plans: forfeitures.

Source: Jdsupra.com, August 2025

Executive Order Directs Regulators to Expand Access to Alternative Assets in 401k Plans

On August 7, 2025, President Donald J. Trump signed an Executive Order titled "Democratizing Access for 401k Investors." This order emphasizes the importance of providing all Americans with access to alternative investments to enhance their retirement savings. It directs federal agencies, including the DOL and the SEC, to review regulatory guidance that restricts 401k plan participants from investing in alternative assets such as private equity, real estate, and infrastructure, which are commonly used by defined benefit plans. While the Executive Order doesn't change existing laws, it represents a significant policy shift aimed at expanding investment options for over 90 million Americans in employer-sponsored defined contribution plans.

Source: Groom.com, August 2025

Retirement Confidence Dips Amid Inflation Concerns; Savers Respond by Cutting Personal Spending While Maintaining 401k Contributions: Study

Charles Schwab's annual survey reveals that retirement savings confidence among 401k participants is declining, primarily due to inflation, which is a concern for 57% of respondents. The percentage of participants feeling "very likely" to meet their savings goals has dropped from 43% to 34%. Despite financial challenges, most 401k investors are not cutting their contributions; only 11% have reduced them. Instead, many are adjusting their spending habits by making fewer purchases (40%) and opting for cheaper products (39%). Additionally, the use of 401k loans and hardship withdrawals has decreased from 26% to 21% over the past year.

Source: Schwab.com, August 2025

Another Forfeiture Case Dismissed

A federal judge has dismissed a lawsuit alleging fiduciary breach related to the use of plan forfeitures to offset employer contributions. The defendants, Siemens Corp., argued in their October 2024 motion that the plaintiff's claims represented a "novel and untenable theory" contrary to established ERISA rules concerning defined contribution plans. The plaintiff claimed that the defendants had discretionary control over the distribution of plan forfeitures, mirroring issues raised in numerous similar cases.

Source: Psca.org, August 2025

How to Guide Participants Through the Retirement Crisis

While much attention is given to the "retirement crisis" concerning participant savings shortfalls, there is a significant, often neglected issue: a lack of accessible, quality retirement advice. As participants increasingly rely on defined-contribution plans, many lack the necessary skills or time to effectively manage their savings and investments. This advice gap can lead to uncertainty for participants regarding their retirement planning. Plan sponsors have the opportunity to help address this gap by offering essential services to support participants in achieving their retirement goals.

Source: Plansponsor.com, August 2025

Dear Plan Providers: Here's the Kind of Content Plan Sponsors Actually Want

As a plan provider -- whether you're an advisor, TPA, recordkeeper, or pooled plan provider -- you've likely encountered the familiar advice to "create content that keeps you top of mind with plan sponsors." But what type of content truly resonates? The key is that plan sponsors are not interested in dense white papers filled with technical jargon. Instead, they prefer practical, easy-to-understand materials that answer the question, "What should I know or do now?" Here are five effective types of content you should be producing.

Source: Jdsupra.com, August 2025

Forfeitures and Fiduciary Risk: What Plan Sponsors Need to Know Now

Forfeitures in 401k plans, often overlooked, are now gaining attention due to recent class-action lawsuits targeting how plan sponsors handle these funds. Traditionally, many plans have used unvested employer contributions leftovers from early-leaving employees to offset future contributions, following IRS guidance. However, some lawsuits argue that this practice could breach ERISA's fiduciary standards. While the outcome of these legal challenges is uncertain, plan sponsors and fiduciaries should proactively review their procedures regarding forfeitures.

Source: Jdsupra.com, August 2025

Pooled Employer Plans (PEPs): Questions to Ask When Selecting

A pooled plan provider is designated in a retirement plan as a fiduciary under ERISA, responsible for administration and ensuring compliance with ERISA and Internal Revenue Code requirements. The Department of Labor has provided guidance for small business owners to help them select a pooled employer plan, offering important questions to consider during the selection process.

Source: Ifebp.org, August 2025

Judge Approves Historic $69M Settlement in UnitedHealth 401k Suit

A federal judge has approved a $69 million settlement in a class action lawsuit against UnitedHealth Group regarding its 401k plan. Plaintiffs alleged that the company violated fiduciary duties under ERISA by keeping poorly performing Wells Fargo target date funds in the plan. Judge R. Tunheim of the U.S. District Court of Minnesota confirmed he would sign the proposed orders with no major changes in the case of Snyder v. UnitedHealth Group, et al.

Source: Hallbenefitslaw.com, August 2025

Senators Urge DOL to Reinstate Cryptocurrency Guidance for 401k Plans

In 2022, the U.S. Department of Labor under former President Joe Biden cautioned fiduciaries against including cryptocurrency options in 401k plans due to their risks. However, this guidance was rescinded in May 2025. Following this change, four prominent Democratic Senators are urging DOL Secretary Lori Chavez-DeRemer to acknowledge the extreme volatility of cryptocurrency and its inappropriateness as a retirement investment.

Source: Hallbenefitslaw.com, August 2025

Why Do Small Businesses Rarely Claim Tax Credits for Offering Retirement Plans?

U.S. policymakers have introduced various incentives to increase retirement plan coverage in the private sector, especially for small businesses, notably through the Section 45E tax credit, which helps cover the costs of establishing and managing employer-sponsored retirement plans. However, a new study indicates that take-up of this credit is very low, with fewer than 6 percent of eligible firms claiming it even in recent years. The study, based on detailed IRS data, suggests that the likelihood of claiming the credit is influenced significantly by the characteristics of firm owners and their tax preparers, pointing to potential informational and behavioral barriers that affect decision-making.

Source: Georgetown.edu, August 2025

DOL Guidance Looks to Boost PEPs, Signals Potential PEP Fiduciary Safe Harbor

The DOL has released guidance titled "Pooled Employer Plans: Big Plans for Small Businesses." This guidance aims to encourage the establishment and adoption of pooled employer plans by outlining how PEPs can help reduce fiduciary risks for employers. Additionally, the DOL is seeking public input through a request for information on various questions related to PEPs.

Source: Erisalitigation.com, August 2025

Forfeitures Cases Proceed With Mixed Results and DOL Weighs In

Approximately 65 class action lawsuits have been filed against 401k plan fiduciaries, alleging that they improperly used participant forfeitures to offset employer contributions instead of covering plan expenses, which were ultimately paid by participants. Although the IRS has previously approved such practices for offsetting employer-matching contributions, a compelling argument has emerged: if a plan document allows fiduciaries the discretion to either benefit the employer or the participants through the use of forfeitures, failing to favor participants may constitute a breach of fiduciary duty.

Source: Captrust.com, August 2025

Using Interlocutory Appeals to Reduce the Scope and Cost of ERISA Class Action Litigation

The writer emphasizes the need for an updated approach to excessive fees and class action litigation under ERISA, suggesting that the traditional litigation methods used by plan sponsors are outdated. He highlights the Supreme Court's decision in Cunningham v. Cornell as an opportunity for defendants to adopt a new strategy. This includes using federal practice tools to encourage district courts to take greater control over class action cases early in the process and to address critical issues sooner, rather than waiting for costly and lengthy discovery at the summary judgment stage.

Source: Bostonerisalaw.com, August 2025

Harnessing AI Under ERISA: A Compliance and Oversight Guide for Retirement and Health Plan Fiduciaries

Artificial intelligence is significantly transforming various aspects of business, including employee benefit plans. It offers opportunities such as automating plan administration and personalizing participant communications. However, this also introduces new responsibilities for those managing ERISA-covered retirement and health plans. Plan sponsors and fiduciaries need to understand how AI aligns with their legal obligations under ERISA and must take proactive measures to use this technology responsibly to enhance participant outcomes.

Source: Benefitslawadvisor.com, August 2025

60% of Global DC Plan Sponsors Cite Concerns Over Members' Retirement Income: Report

According to a recent WTW report, 60% of global defined contribution plan sponsors identify the adequacy of members' retirement income as the primary challenge for DC plans over the next decade. The report, which analyzed nearly 30 global DC plans with more than $6.3 trillion in assets, highlighted that concerns are particularly prevalent in regions with low minimum contribution levels or where auto-enrollment is misinterpreted as sufficient for retirement savings. Several plans are increasingly focusing on retirement adequacy rather than merely on coverage and participation, indicating a shift towards more comprehensive reform and public awareness in this area.

Source: Benefitscanada.com, August 2025

Roth Catch-Up Mandate and Controlled Groups: Peeling the Onion

In early 2025, Alight hosted a blog post and webinar discussing the impact of various payroll systems on retirement plans, particularly in relation to the Roth catch-up rule. Following these discussions, clients raised concerns about how this rule affects retirement plans within controlled groups participating in a single defined contribution plan. Proposed IRS rules from January 2025 revealed that the implications of this situation are more complicated than anticipated.

Source: Alight.com, August 2025

DOL Issues Guidance to Encourage Small Employers to Participate in Pooled Employer Plans

The DOL has acted in response to an Executive Order aimed at addressing the cost-of-living crisis by issuing guidance on Pooled Employer Plans on July 28, 2025. The document, titled "Pooled Employer Plans: Big Plans for Small Employers," emphasizes the DOL's strong support for PEPs as a means of helping small employers select affordable, high-quality retirement plans. The guidance also includes limited advice on reducing fiduciary liability for plan sponsors. The DOL and White House view PEPs as a significant opportunity for cost savings, particularly over the long term in retirement planning.

Source: Wagnerlawgroup.com, August 2025*

Providers Lean on Tech to Lower Costs in Small 401k Plans

In the retirement industry, "fees" are a significant concern for plan sponsors, retirees, and participants, often leading to negative implications and potential litigation. Small employers, hesitant about participating in a Pooled Employer Plan due to high costs, can explore automation as a solution for reducing fees. Experts believe that technology can help lower these costs for smaller employers, though fees continue to pose a challenge for those considering retirement plans.

Source: Plansponsor.com, August 2025

Staffing Up: The When and How for Retirement Plan Advisory Firms

As financial firms grow, strategically expanding their teams is crucial for long-term success. Brian Becker of Becker Suffern McLanahan Ltd. emphasizes that despite the challenges posed by regulation and competition, there are more resources available than ever. Effective growth requires careful planning, particularly in staffing and support. Leaders at advisory firms must identify indicators for additional support while balancing client demands and preserving the firm's culture.

Source: Planadviser.com, August 2025

Participants Are Less Optimistic About Reaching Savings Goals: Schwab

In 2025, retirement confidence has declined, driven by persistent inflation and an increased expected retirement age, according to a report from Charles Schwab. The "2025 Workplace Survey 401k Plan Participants" found that 57% of participants viewed inflation as a major barrier to achieving a comfortable retirement, with the average expected retirement age rising to 66 from 65 in 2024. Additionally, only 34% felt very likely to meet their savings goals, down from 43% in the previous year.

Source: Planadviser.com, August 2025

DOL Sails on From DC Annuity Safe Harbor in Deregulatory Push

The DOL plans to repeal its annuity selection safe-harbor regulation for defined contribution plans effective September 2, unless significant public objections arise. DC plan fiduciaries will still have access to a similar statutory safe harbor introduced by the SECURE Act of 2019. This move is part of a broader effort by the DOL to eliminate outdated regulations as instructed by an executive order from February 6.

Source: Mercer.com, August 2025

Plan Design That Works: Why 401k Participants Are Saving Smarter

Vanguard's latest "How America Saves" report highlights positive trends in retirement saving among participants, attributing these improvements to intentional plan design choices. The report reveals that smarter design leads to increased savings, better engagement, and enhanced retirement resilience. Key strategies include automatic savings increases, default enrollments in professional management, and access to both pre-tax and Roth options. This proactive approach benefits participants and ultimately reduces fiduciary risk for plan sponsors, as better outcomes lead to fewer legal challenges and complaints. Overall, a well-designed retirement plan creates a win-win situation for both employees and sponsors.

Source: Jdsupra.com, August 2025

Cleaning Out the ERISA Attic: DOL Retires Obsolete Interpretive Bulletins

The DOL has taken action on June 30 to remove several outdated and potentially confusing ERISA Interpretive Bulletins from the Code of Federal Regulations. This move aims to clear away old clutter that no longer serves a purpose, reflecting a more streamlined and understandable approach to ERISA regulations. Essentially, the DOL has tackled outdated materials to improve clarity and relevance in the regulatory landscape.

Source: Jdsupra.com, August 2025

DOL Signals Shift to a More Fiduciary-Friendly Enforcement of ERISA

Under the second Trump Administration, plan sponsors and fiduciaries questioned how the DOL would pursue its policy goals amidst a deregulatory agenda and diminishing regulatory authority due to court decisions. Recently, the DOL has begun to demonstrate a more fiduciary-friendly approach to enforcing ERISA.

Source: Jdsupra.com, August 2025

401k Suit Asserts Fiduciary Breach With Managed Account, Forfeitures

Siemens Energy, Inc. has been charged with a fiduciary breach involving its $3.5 billion Savings Plan. The class action suit, filed by participant Brian Babinski, alleges multiple violations: excessive recordkeeping fees, high costs for managed accounts, a poorly performing stable value option, and the use of forfeitures to offset employer contributions. The fiduciaries named in the suit include Siemens Energy, Inc., its Board of Directors, and various administrative and investment committees.

Source: Asppa-net.org, August 2025

IRI to DOL: Don't Undermine Annuity Access in 401k Plans

The Insured Retirement Institute is calling on the U.S. Department of Labor to reconsider its plan to withdraw a long-standing safe harbor regulation that facilitates the inclusion of annuities in workplace retirement plans. IRI argues that eliminating this regulation could disrupt effective fiduciary practices and create challenges in offering lifetime income options. They warn that this change could contradict the objectives of the SECURE Act and SECURE 2.0, which aim to promote guaranteed retirement income.

Source: 401kspecialistmag.com, August 2025

Small Employers Not Taking Advantage of Plan Startup Tax Credits: And That's a Big Problem

A recent working paper from the National Bureau of Economic Research reveals that a significant number of small employers are not utilizing tax credits designed to encourage them to establish retirement plans for their employees. Only 5.5% of eligible small businesses claim the Section 45E credit, which aims to incentivize retirement plan formation and has been improved through the SECURE Act and SECURE 2.0. Moreover, many small businesses that do not offer retirement plans are unaware of these available tax incentives.

Source: 401kspecialistmag.com, August 2025

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