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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Retirement Savings to Retirement Income 401k Participant Perspectives: Study

Traditional 401k plans have often lacked a mechanism for converting retirement savings into a consistent monthly income for retirees. However, this is starting to change, partly due to the SECURE Act. To better understand 401k participants' views on this issue, Nuveen and the TIAA Institute conducted a survey focused on the conversion of retirement savings into retirement income, particularly the role of in-plan annuities. The 18-page report outlines the key findings from this Participant Sentiment Survey on Lifetime Income.

Source: Tiaa.org, May 2025

What You Need to Know About QDROs: Dividing Retirement Benefits in Divorce

Dividing retirement benefits during a divorce is complex, often requiring a Qualified Domestic Relations Order to ensure proper allocation of benefits between the plan participant and an alternate payee, typically a former spouse or dependent. Understanding QDROs can help prevent delays and protect interests. This guide offers essential information from the DOL, the IRS, and the GAO to assist clients, family law attorneys, and retirement plan administrators in navigating QDROs more effectively.

Source: Sblgllp.com, May 2025

Workers Overwhelmingly Call on Employers to Offer Lifetime Income in 401k Plans

A recent survey by Nuveen and the TIAA Institute reveals a significant shift in attitudes toward retirement income among 401k participants. Nearly all respondents (93%) believe it is essential for their retirement plans to offer options for converting savings into guaranteed monthly income that lasts a lifetime. Additionally, 87% feel that employers should help ensure employees achieve retirement income security. This represents a dramatic rise in interest in guaranteed lifetime income, with only 59% of workers expressing the same view in a 2021 survey.

Source: Prnewswire.com, May 2025

Lawsuit Filed Against UnitedHealth Alleging Misuse of Forfeited 401k Plan Assets

UnitedHealth Group Inc. is facing a federal class action lawsuit, Kotalik et al. v. UnitedHealth Group Inc. et al., filed on April 28 in the District of Minnesota. The lawsuit alleges that UnitedHealth and the administrative committee of its 401k Savings Plan misused forfeited employee retirement plan assets, violating fiduciary duties under ERISA. Four current and former employees represent over 250,000 plan participants, claiming that the company improperly utilized 401k forfeitures to offset its contributions instead of covering plan expenses, which the plaintiffs argue is a breach of ERISA regulations.

Source: Planadviser.com, May 2025

Understanding Student Loan Matching Programs

Student loans can hold your employees back and their retirement savings too. A student loan matching program can change that. This 6-page paper talks about how a student loan matching program works and why these programs are a game-changer.

Source: Pensionplanspecialists.com, May 2025

The Truth About Auto-Portability

Auto-portability, established in 2018 and enhanced by SECURE 2.0, has faced criticism in articles that promote it over automatic rollover IRAs, often misrepresenting its business model and overstating survey results to showcase its advantages. Moreover, there are alternative options that may provide better financial outcomes. This article is the first in a three-part series aimed at clarifying the auto-portability program, its process, responsibilities, and intended outcomes, helping readers assess its suitability for themselves or their clients.

Source: Penchecks.com, May 2025

Terms of Intuit Forfeiture Suit Settlement Unveiled

A settlement has been reached in a lawsuit involving Intuit, filed in the Northern District of California by plaintiff Deborah Rodriguez in October 2023. This case concerns forfeiture reallocation, and after 18 months, including a failed motion to dismiss, Intuit and Rodriguez have notified the court of their settlement, facilitated by mediator Hon. Morton Denlow (Ret.). Court approval is necessary for the settlement, and the parties will provide details on the process leading to the agreement.

Source: Napa-net.org, May 2025

Suit Says Cigna Committed Fiduciary Faults With Stable Value, Forfeitures

A lawsuit has been filed by participants Amanda Reven and Antoinette Argentine, accusing The Cigna Group 401k Plan Retirement Plan Committee of fiduciary breaches related to a stable value option and misuse of plan forfeitures. The plaintiffs, represented by Capozzi Adler PC, claim that the committee failed to properly and adequately review the plan's investment portfolio, both initially and continuously, to ensure that each investment option was prudent in terms of performance.

Source: Napa-net.org, May 2025

What is an Improper Use of Forfeiture Case Worth? Intuit Settlement Provides Perspective

On Friday, May 16th, the plaintiff's counsel in the Rodriguez v. Intuit Inc. case submitted a motion to approve a settlement of $1,995,000. The motion suggests that this settlement represents a reasonable compromise between the parties involved; as the saying goes, a fair compromise often leaves no one entirely satisfied. The resolution raises questions about the implications for other ongoing cases and retirement plans that have historically used forfeitures to adjust employer contributions.

Source: Mmmlaw.com, May 2025

AI in 401k Plans: Cool, But Who's Getting Sued When It Goes Wrong?

The concept of Artificial Intelligence can seem intimidating, often resembling themes from sci-fi movies like Terminator. However, AI is making inroads in the 401k industry, particularly in areas such as participant engagement, plan analytics, and investment management. Despite its capabilities, many 401k plan sponsors lack a deep understanding of both their plan documents and AI's underlying technology. While AI offers useful solutions, it also introduces significant legal and compliance challenges that can put a strain on plan sponsors, raising concerns about fiduciary responsibilities.

Source: Jdsupra.com, May 2025

How AI Is Transforming 401k Education for the Next Generation

Incorporating AI into 401k education marks a substantial advancement over current digital employee education platforms. The era of relying solely on quarterly enrollment meetings for employee education is over. Thanks to online delivery systems, employees can now access information on demand, eliminating the need to wait for scheduled meetings.

Source: Fiduciarynews.com, May 2025

Pizarro v. Home Depot and the Future of ERISA Litigation

Following its landmark ruling in Cunningham v. Cornell University, the Supreme Court is now addressing another significant ERISA case, Pizarro v. Home Depot, Inc. The central question in Pizarro is which party carries the burden of proof regarding causation after the plaintiff has plausibly presented their case and demonstrated a loss. Unlike in Cunningham, the Pizarro case does not involve prohibited transactions or exemptions, suggesting that its ruling could have wider implications for future ERISA litigation.

Source: Fiduciaryinvestsense.com, May 2025

Documentation and Review: Reminders for the ERISA Plan Fiduciaries

This article highlights specific actions that plan sponsors should take to enhance their compliance measures. These include: implementing a systematic approach for selecting and monitoring service providers, regularly reviewing and updating service provider contracts to ensure reasonable fees and transparency, ensuring that plan documents adhere to relevant state and federal regulations, gaining a clear understanding of the fees associated with administration, consulting, and plan networks, and updating contracts and procedures to address cybersecurity responsibilities.

Source: Barran.com, May 2025

Forfeiture Litigation: Treat It As a Nothing Burger at Your Own Peril

Forfeiture lawsuits are emerging as a significant trend in ERISA litigation, eliciting varied reactions, often filled with frustration or dismissal. While some may downplay the importance of these lawsuits, advisors are encouraged to recognize their significance. Emotional responses can hinder plan sponsors and fiduciaries, while also obscuring an opportunity for retirement plan advisors to provide a more informed and nuanced understanding of the issue.

Source: Wealthmanagement.com, May 2025*

Benefits Council Proposes New Ways to Use Retirement Surpluses to Boost Benefits, Raise Revenue

The American Benefits Council has proposed changes to allow employers to better utilize surplus assets in retirement plans. The first proposal seeks to enable surplus assets from defined benefit pension funds to be transferred to participants' defined contribution plans without having to terminate the defined benefit plan, a change that is currently restricted. The second proposal would allow surplus assets from retiree health accounts to be transferred to cover other benefits, such as active employee health benefits. These changes aim to benefit employees while also increasing revenue for the federal government.

Source: Plansponsor.com, May 2025

Cigna Hit With Forfeiture Lawsuit; Intuit Reaches Settlement

As lawsuits persist against companies accused of mishandling forfeited funds in 401k plans in violation of their obligations under ERISA, Cigna Group has become the latest firm to be sued regarding its management of forfeitures. In contrast, software giant Intuit Inc. has reached a settlement after the court approved the case to proceed into 2024.

Source: Plansponsor.com, May 2025

The Part-Time 401k Plan Participant

The SECURE Act and SECURE 2.0 have enhanced access to employer-sponsored retirement plans for many part-time employees. To improve these workers' retirement readiness, sponsors must recognize the unique challenges they face compared to full-time employees. This includes focusing on onboarding, education, communication, and plan design tailored to part-time workers. By addressing their distinct needs, employers can foster inclusivity and create a more cohesive workforce.

Source: Fiduciaryadvisors.biz, May 2025

Selecting a Qualified Default Investment Alternative (QDIA)

As an employer, you have the opportunity to provide a range of benefits that support your employees in achieving financial security, particularly regarding retirement. One valuable option is a Qualified Default Investment Alternative. A QDIA serves as the default investment choice within an employer-sponsored retirement plan. If an employee makes contributions to the plan without indicating their preferred investment strategy, their funds will be automatically directed to the QDIA. This is a brief overview of its function and importance.

Source: Captrust.com, May 2025

Many Small Biz Owners Not Saving for Retirement: Survey

A recent report from WealthRabbit highlights a significant retirement crisis among small business owners, revealing that one in five have no retirement savings, and most have saved less than $50,000. Many may rely on the sale of their business for retirement funds, but one in three respondents doubt they will ever be able to retire. The 2025 WealthRabbit Small Business Retirement Report indicates that the traditional retirement system is failing this demographic, with women particularly affected, being twice as likely as men to have no savings.

Source: 401kspecialistmag.com, May 2025

CPA Guide: What Exactly Do TPAs Do?

The retirement industry can be complex and filled with numerous acronyms, making it challenging to navigate. What is a TPA? TPAs specialize in administrative operations for plan sponsors, ensuring compliance with relevant laws and regulations, primarily those from the IRS and DOL. Their role involves various tasks to assist in managing retirement plans effectively.

Source: Spconsultants.com, May 2025

New Law Firm Brings Forfeiture Case Against W.W. Grainger

A lawsuit has been filed against W.W. Grainger's 401k plan, which has over 30,000 participants and approximately $3.45 billion in assets, for alleged breaches of fiduciary duties under ERISA. The plaintiffs claim that the plan's fiduciaries misused forfeitures to benefit the company by reducing future employer contributions. This practice is said to violate the responsibilities of loyalty and prudence mandated by ERISA.

Source: Psca.org, May 2025

How Much Do Companies Typically Match on 401k

Employee matching contributions are a prevalent feature in employer-sponsored retirement plans, with 98% of employers offering some form of match to enhance employee savings. Beyond being a benefit, matching contributions serve as a strategic tool for employers to attract and retain top talent, boost productivity, and increase engagement. By linking matches to vesting schedules, employers can incentivize employees to remain with the company longer, resulting in increased savings for employees and better utilization rates for employers.

Source: Myubiquity.com, May 2025

Timely Use of Forfeitures

The IRS mandates that forfeitures in defined contribution plans must be utilized within 12 months after the end of the plan year in which they occur. Failure to comply with this timeline is deemed a compliance issue. Many plan sponsors unknowingly violate this requirement, leading to potential problems. However, the IRS is currently providing a temporary reprieve for affected plan sponsors, allowing them to resolve these compliance failures if they take action promptly.

Source: Legacyrsllc.com, May 2025

Giant Eagle Settles ERISA Class Action Suit Alleging Failure to Control 401k Plan Costs

Giant Eagle, a grocery store chain, has settled a class action lawsuit that claimed it violated ERISA by not adequately managing administrative and recordkeeping costs for its 401k plan. The lawsuit, led by a former employee, alleged that this negligence resulted in significant financial losses for plan participants. The details of the settlement reached through mediation, have not been disclosed. The case is Cheryl Kehrer v. Giant Eagle Inc. et al., in the U.S. District Court for the Western District of Pennsylvania.

Source: Hallbenefitslaw.com, May 2025

Mandatory Automatic Enrollment for New 401k/403b Plans Gets Much Needed Guidance

SECURE 2.0 mandated, for the very first time, a special automatic enrollment arrangement be added to all new 401k and 403b plans. In this comprehensive article, Groom principals Elizabeth Thomas Dold and David Levine explore essential facets of the IRS proposed regulations covering this new mandate. They discuss which plans fall under the regulations, the functioning of automatic enrollment features, and any applicable exceptions. Additionally, the article details the necessary compliance steps and highlights specific considerations regarding mergers, acquisitions, and multiple employer plans.

Source: Groom.com, May 2025

Callan 2025 DC Trends Survey: Continued Focus on Fees and Fund/Manager Due Diligence

The 2025 Defined Contribution Trends Survey analyzes key aspects of DC plan management, including governance, investments, fees, and plan design. As the 18th annual edition, it offers benchmarks for plan sponsors to compare their plans with peers and provides actionable insights to enhance plan effectiveness and participant outcomes. Conducted online at the end of 2024, the survey gathered responses from 89 DC plan sponsors across various industries, primarily from financial services and government. This article highlights the significant findings from the survey.

Source: Callan.com, May 2025

Employers Prioritize Fees and Investment Structure in DC Plans

In 2024, plan sponsors were prioritizing investment management fees, fund and manager due diligence, and evaluation of investment structures, according to Callan's 2025 Defined Contribution Trends Survey. The survey, involving 89 plan sponsors, reveals that over 90% of the plans have assets exceeding $200 million, with 58% serving more than 10,000 participants. The findings aim to identify key trends affecting defined contribution workplace plans.

Source: 401kspecialistmag.com, May 2025

Sixth Circuit Ruling Shows Toughening on ERISA Fiduciary Suits

A recent decision by the Sixth Circuit upheld the dismissal of a proposed class action against Denso International America, highlighting a trend among appellate courts to raise the standards for cases alleging breaches of fiduciary duty under federal benefits law. The three-judge panel supported a Michigan federal court's July 2023 ruling that rejected former employee Martha D. England's ERISA lawsuit for lack of a valid claim. This ruling has prompted defenses from attorneys representing employers in similar 401k excessive fee cases in other courts, including Florida and the Eighth Circuit.

Source: Wagnerlawgroup.com, May 2025

Supporting the Sandwich Generation: A Guide for 401k Plan Sponsors

Employees in the sandwich generation -- those balancing the financial demands of caring for aging parents while raising dependent children -- often find it challenging to concentrate on their long-term financial objectives. Plan sponsors have a distinct opportunity to support this demographic by providing tailored financial wellness resources and plan features aimed at alleviating their financial burdens. Here’s how employers can better assist this crucial segment of the workforce and guide them toward a more secure retirement. This overview outlines key strategies plan sponsors can implement to make a difference.

Source: Savantwealth.com, May 2025

DOL May Not Have the Authority Over IRAs It Thinks It Has

Critics of the Retirement Security Rule argue that the DOL should not regulate rollovers between individual retirement accounts. They view these rollovers as a weak point in the rule, finalized in April. Legal experts generally agree that the DOL likely lacks the authority to impose fiduciary responsibilities under ERISA's Title I on IRAs. Kendra Isaacson, a former Senate pension policy director, notes that the DOL's jurisdiction is particularly questionable for rollovers not involving employer-sponsored plans, such as those between IRAs or from IRAs to annuities.

Source: Plansponsor.com, May 2025

SEC Guidance Clarifies Insider Trading Rules for 401k Brokerage Windows

The SEC has clarified that when a 401k plan participant sells company stock through a self-directed brokerage window, the transaction must comply with all aspects of Rule 10b5-1(c)(1) to ensure protection against insider trading liability. A self-directed brokerage window allows participants to independently trade a wider range of investments beyond the standard offerings of the plan. As a result, participants subject to insider trading rules face the same trading restrictions on company stock in their 401k accounts, regardless of whether the shares are part of the plan's core investments or obtained through the brokerage window.

Source: Planadviser.com, May 2025

Sixth Circuit Stands by Plausibility Standard in 401k Excessive Fee Suit

The court rejected the plaintiffs' claims that the Commonspirit case was not relevant, noting that comparisons based solely on industry surveys are insufficient. It also disagreed with the Seventh Circuit's ruling in Hughes v. Northwestern University, stating that it lacks the context-specific details needed to demonstrate that fees are "excessive relative to the services rendered." In summary, in the Sixth Circuit, plaintiffs are required to provide plausible arguments that include both a comparison of fees and the services provided, rather than relying solely on fee comparisons.

Source: Napa-net.org, May 2025

Bill Would Lower Retirement Plan Eligibility Age to 18

Senators Bill Cassidy and Tim Kaine have reintroduced the Helping Young Americans Save for Retirement Act, which aims to lower the participation age for ERISA-governed plans from 21 to 18 years old. The bill seeks to encourage retirement savings among younger workers, while still allowing plans to establish a minimum age younger than 18 if they choose. This legislation was previously introduced in November 2023.

Source: Napa-net.org, May 2025

Big Win for Savers: Reconciliation Bill Spares Retirement Plans

The influential House Ways and Means Committee ensured that retirement plans remain unaffected by its reconciliation proposal. "The real story here is what's absent from the proposal, any negative implications for retirement plans," said ARA CEO Brian Graff. He described this outcome as a significant victory for both plan sponsors and participants, as well as for the integrity of the nation's retirement plan system overall.

Source: Napa-net.org, May 2025

Remember That Your 401k Plan Is an Employee Benefit

This article emphasizes the importance of remembering the original purpose behind implementing 401k plans, as many plan sponsors tend to lose sight of this over time. With 27 years of experience as an ERISA attorney, the author has observed numerous sponsors who no longer recall the foundational reasons for their plans, highlighting the need for intent and clarity in managing retirement benefits.

Source: Jdsupra.com, May 2025

Employers Say Their Benefits are Modern, Employees Don't Agree: Study

A study by Prudential reveals a significant gap between employers and employees regarding the perception of benefits, with 86% of employers deeming their benefits modern, while only 59% of workers agree. Workers face challenges such as saving for retirement (45%), rising everyday costs (44%), housing expenses (29%), and living paycheck to paycheck (26%). Notably, 1 in 10 workers rank financial survival as their primary concern. The findings highlight a disconnect between the benefits companies provide and the actual needs of employees.

Source: Hrdive.com, May 2025

Using 401k AI to Close Savings Gaps With Fiduciary Fixes

Using 401k AI to address retirement savings gaps shows significant potential but also brings increased fiduciary responsibilities. Many participants are unprepared for retirement, with savings disparities often tied to demographic factors that may go unnoticed without detailed analysis. AI can help identify these hidden gaps, and fiduciaries are increasingly tasked with utilizing these insights to implement targeted solutions that ensure equitable retirement outcomes for all employees.

Source: Fiduciarynews.com, May 2025

SECURE 2: What Service Providers Need to Do Now to Support Plan Sponsors and Participants

To maximize the benefits of SECURE 2.0 for plan sponsors and participants, service providers like recordkeepers, financial advisors, and third-party administrators need to adapt their services to comply with new regulations. They face challenges in maintaining compliance, improving implementation efficiency, and facilitating connections among recordkeepers, plan sponsors, and participant outcomes. This article highlights three key provisions that will have significant impacts starting in 2025.

Source: Enterpriseiron.com, May 2025

Considerations for Plan Sponsors in the Wake of Cunningham v. Cornell

ERISA-related lawsuits, particularly those involving excessive fees, have significantly increased over the past decade, with newer strategies like forfeiture litigation gaining traction. While lawsuits were once primarily aimed at billion-dollar plans, smaller plans are now also being targeted. In 2024, there were a record 53 settlements totaling over $200 million, with an average settlement of $4.6 million. However, there are strategies that plan sponsors can implement to reduce their risk of litigation.

Source: Carltonfields.com, May 2025

It's Time to Restate Your 403b Plan: Deadline Looms

Organizations sponsoring 403b retirement plans must heed the IRS deadline for plan restatements. Ignoring this deadline could lead to compliance risks and penalties. Non-profits, public school districts, and government entities utilizing pre-approved plan documents should ensure timely restatement of their plans to avoid potential issues.

Source: Brickergraydon.com, May 2025

Navigating Generational Shifts: Tailoring 401k Communication Strategies Across Age Groups

It's crucial to tailor communication strategies to engage effectively with different generations: Baby Boomers, Gen X, Millennials, and Gen Z. Using a one-size-fits-all approach may hinder engagement with plan sponsors and participants. Customized messaging is essential for fostering stronger connections and improving outcomes for diverse age groups in the workplace.

Source: 401k-marketing.com, May 2025

Fiduciary Duty in the Digital Age: Cybersecurity Best Practices for ERISA Plans

Cybercriminals target ERISA retirement plans due to their vulnerabilities in access and opportunity. They exploit weaknesses in systems, software, and human behavior, such as compromised credentials, to steal information. The digital nature of plan administration and reliance on third-party services create a wide attack surface for cyber threats. A breach of fiduciary duty occurs when plan fiduciaries, like administrators or trustees, fail to protect plan assets or participant data from these threats. This responsibility includes implementing adequate cybersecurity measures, addressing data breaches, and managing cybersecurity risks effectively. This article offers an in-depth analysis of these issues.

Source: Woodruffsawyer.com, May 2025*

Universal Savings Account Proposal Reintroduced

U.S. Sen. Ted Cruz has introduced the Universal Savings Account Act, which aims to create tax-advantaged savings accounts that allow American families to save without the usual restrictions and penalties of traditional accounts. Rep. Diana Harshbarger has introduced companion legislation in the House. USAs would enable participants to save, invest, and withdraw funds freely for any purpose.

Source: Senate.gov, May 2025

Intuit Reaches Settlement in Forfeiture Case

Intuit has chosen to settle a lawsuit related to a fiduciary breach concerning the use of plan forfeitures after unsuccessful attempts to dismiss the case. Filed in October 2023 in the Northern District of California, the lawsuit highlighted that the Plan allowed forfeited nonvested accounts to be used for administrative expenses or to lower future Company matching contributions. Eighteen months later, following a failed motion to dismiss, Intuit and the plaintiff, Deborah Rodriguez, reached a settlement with the help of mediator Hon. Morton Denlow (Ret.) and are seeking court approval for their agreement.

Source: Psca.org, May 2025

2025 PLANADVISER Adviser Value Survey

The 2025 PLANADVISER Adviser Value Survey reveals that 46.3% of plan sponsors using an adviser value "evaluation and monitoring of investment lineup" the most. This finding highlights the key influence advisers have on retirement plan outcomes. The survey analyzes responses from the PLANSPONSOR Defined Contribution Survey, focusing on aspects like investment lineups, plan governance, fiduciary guidance, and plan design.

Source: Planadviser.com, May 2025

Schlichter Bogard Files Second 401k Forfeiture Reallocation Suit

The law firm Schlichter Bogard LLC has filed a lawsuit against Northrop Grumman, focusing on a fiduciary breach related to the reallocation of plan forfeitures. The lawsuit claims that the defendants unlawfully charged plan administrative expenses to participants' retirement accounts, violating ERISA. The suit includes a demand for a jury trial, addressing a growing area of litigation in this context.

Source: Napa-net.org, May 2025

Empower Escapes Swiss Re 401k Fiduciary Suit

A recent ERISA fiduciary breach lawsuit against the fiduciaries of the $1.45 billion Swiss Re Group U.S. Employees' Savings Plan and service provider Empower has ended quickly in favor of the recordkeeper. The lawsuit, filed just weeks ago, included multiple allegations of fiduciary breaches. The likely reason for its abrupt conclusion is that recordkeepers, like Empower, are generally not considered fiduciaries, which weakens the chances of success for such lawsuits.

Source: Napa-net.org, May 2025

DOL Issues Temporary Enforcement Policy for Small Amount Transfers to State Unclaimed Property Funds

The DOL recently released Field Assistance Bulletin 2025-01, which offers a temporary enforcement policy concerning the transfer of small retirement plan benefits to state unclaimed property funds. This guidance aims to assist fiduciaries in meeting their ERISA obligations to locate participants and ensure they receive their retirement benefits, especially regarding uncashed checks and amounts that have been involuntarily distributed. However, plan fiduciaries are advised to carefully consider and consult legal counsel on the appropriateness of escheatment in different situations.

Source: Morganlewis.com, May 2025

SEC Adds 10b5-1 Guidance for 401k Plans With Company Stock Investment Options

The SEC's Division of Corporation Finance has introduced a new Exchange Act Compliance and Disclosure Interpretation that clarifies the rules for 401k plan participants who are subject to insider trading regulations. According to the CDI, when such a participant sells company stock through a self-directed brokerage window, the transaction must comply with all requirements outlined in Rule 10b5-1(c)(1), which pertain to both the purchase and sale of the issuer's securities in the open market.

Source: Haynesboone.com, May 2025

Prepare Now for Mandatory Roth Catch-Up

In January 2025, proposed Treasury regulations regarding catch-up contributions were released, offering guidance on the mandatory Roth catch-up requirement introduced by section 603 of Division T of the SECURE 2.0 Act of 2022. Under this rule, individuals aged 50 and older must make catch-up contributions to eligible plans on a Roth basis if their prior year's wages exceeded $145,000 (adjusted for inflation). This requirement applies to 401k, 403b, and governmental 457b plans. This article specifically discusses the implications of the mandatory Roth catch-up rule for 401k plans.

Source: Bclplaw.com, May 2025

Texas Federal Court Allows an ERISA Fiduciary Challenge Against Alleged "ESG Investing" Without Any ESG Funds

On January 10, 2025, the Texas federal district court ruled in Spence v. American Airlines that both American Airlines and the committee managing its 401k plans violated their fiduciary duty under ERISA. This breach was primarily related to proxy voting of securities within specific investment funds in the 401k plans. The decision is noteworthy as it may pave the way for new types of ERISA fiduciary litigation targeting 401k plans, emphasizing proxy voting rather than traditional concerns like investment performance or administrative costs. This article discusses the court's findings, legal implications, and key considerations for 401k plan sponsors and fiduciaries in light of this ruling.

Source: Troutman.com, May 2025

Plan Sponsors Beware: The U.S. Supreme Court Just Eased Requirements to File ERISA Prohibited Transaction Suits

In the case of Cunningham v. Cornell University, many ERISA retirement plan sponsors and fiduciaries hoped the U.S. Supreme Court would establish new pleading standards to mitigate the increase in litigation against such plans. However, the Court ruled that plaintiffs are not responsible for proving that ERISA Section 408 exemptions do not apply; instead, plan sponsors and fiduciaries must assert these exemptions as affirmative defenses. This ruling is expected to lead to a new surge of lawsuits targeting ERISA plans related to essential transactions with service providers.

Source: Ropesgray.com, May 2025

Impact of Forfeiture Lawsuits on Plan Sponsors

Companies have discretion on how to use forfeitures -- unvested company contributions when an employee leaves -- provided the policy is clearly stated in the plan document. Common uses for these forfeitures include reducing contribution obligations to existing participants, covering plan fees, or reallocating funds to other participants. According to PSCA's 67th Annual Survey, historically about 60% of plans reduce company contributions with forfeitures, around 50% use them to offset expenses, and about 10% reallocate them. As lawsuits related to forfeitures increase, there is interest in whether companies are maintaining or changing their forfeiture policies.

Source: Psca.org, May 2025

Strategies to Help Employees Maximize Retirement Benefits

Participation in company-sponsored retirement plans is gradually increasing, but employers still face pressure to enhance participation. Recent surveys reveal that 83% of employees regret their retirement plan decisions, 41% intend to work longer than expected, and 83% plan to continue working after retirement. While the current investment environment contributes to this anxiety, the lack of retirement readiness has been an ongoing issue, even during times of strong market performance. The challenge lies not only in creating effective retirement plans but also in encouraging employee engagement and participation.

Source: Planpilot.com, May 2025

Emergency Savings Linked to Less 401k Loan Use, Stronger Retirement Outcomes

A February survey by National Debt Relief reveals that substantial debt is affecting Generation X and Baby Boomers, leading some to postpone retirement. Among 1,000 surveyed individuals, 45% reported carrying an average credit card balance of nearly $9,000, with monthly payments of around $418. Additionally, T. Rowe Price's annual Reference Point report highlights trends in retirement planning, showing a 4% increase in average loan sizes in 2024, slightly outpacing inflation, across all age groups. While loan usage among 401k participants grew by two percentage points from 2023, it remains lower than the peaks seen between 2015 and 2019.

Source: Planadviser.com, May 2025

Settlement Reached in Principle in Pentegra Fiduciary Breach Case

Parties involved in an ERISA fiduciary breach lawsuit concerning Pentegra's multiple employer retirement plan have reached a settlement in principle, as noted in a court order on May 2, filed in the U.S. District Court for the Southern District of New York. The case was poised for further court proceedings to address prohibited transaction claims. Recently, a jury awarded a class of plan participants over $38 million for fiduciary breaches under ERISA. U.S. District Judge Philip M. Halpern stated that all remaining deadlines are paused while the parties finalize the settlement terms, and they are required to seek preliminary approval of the settlement or provide a status update by May 16.

Source: Planadviser.com, May 2025

Judge Finds in Favor of Knight-Swift in 401k Forfeiture Case

A federal judge in Arizona has dismissed a class action lawsuit against Knight-Swift Transportation Holdings, which was accused of improperly using forfeited assets from its 401k retirement plan. The lawsuit claimed that the company violated ERISA by using these funds to offset company contributions instead of covering plan expenses. A key point of contention was whether Knight-Swift was obligated by its annual Form 5500 filings to the DOL, which stated that forfeited assets "shall be used" for plan expenses.

Source: Planadviser.com, May 2025

Hardship Distributions: Tapping Into Retirement Savings, a Last Resort

A 401k plan is a crucial part of retirement savings for many Americans. In times of financial emergencies, individuals may consider hardship distributions, which are early withdrawals permitted under certain conditions. While these distributions can provide immediate financial relief, they involve specific rules and tax implications that both plan sponsors and individuals need to be aware of before requesting a hardship withdrawal from their company 401k plan.

Source: Newfront.com, May 2025

Kaiser Prevails in Motion to Dismiss 401k Forfeiture Reallocation Suit

A fiduciary defendant, Kaiser Foundation Health Plan, along with related entities, has successfully dismissed a lawsuit filed by Stacey M. Madrigal. The suit claimed a fiduciary breach concerning the use of plan forfeitures to offset employer contributions, alleging violations of ERISA.

Source: Napa-net.org, May 2025

High Court Sets Low Bar for ERISA Prohibited Transaction Claims

The U.S. Supreme Court's unanimous ruling in Cunningham v. Cornell University has made it easier for plaintiffs in excessive fee lawsuits against ERISA plans to advance their prohibited transaction claims. The decision establishes a low pleading standard, which may hinder fiduciaries' ability to dismiss such claims at the early stages of litigation. While the ruling could lead to an increase in these lawsuits and settlements, the Court acknowledges that lower courts have mechanisms to mitigate baseless claims. The impact on sponsors and fiduciaries will largely depend on how proactively lower courts utilize these tools.

Source: Mercer.com, May 2025

Supreme Court Clarifies ERISA Prohibited Transaction Pleading Standards

On April 17, 2025, the U.S. Supreme Court issued a unanimous ruling in Cunningham v. Cornell University, establishing a more favorable pleading standard for plaintiffs in ERISA-prohibited transaction claims. Authored by Justice Sonia Sotomayor, the decision reversed the Second Circuit's ruling, clarifying that plaintiffs do not need to preemptively state that ERISA's exemptions are not applicable. Instead, it is the responsibility of plan fiduciaries to assert and prove these exemptions as affirmative defenses.

Source: Erisalitigationadvisor.com, May 2025

Controlled Group or Affiliated Service Group? What That Means for Your 401k Plan Compliance

If your business is part of a Controlled Group or an Affiliated Service Group, it may face compliance issues concerning its 401k plan. Misunderstandings about these affiliations can lead to severe consequences, including plan disqualification, costly corrections, IRS penalties, and employee dissatisfaction. The positive aspect is that many of these issues can be resolved if addressed promptly. The article outlines the potential consequences, corrective actions, and strategies to safeguard your plan against audit risks.

Source: Employeebenefitslawgroup.com, May 2025

Fiduciary Update: May 2025

Every quarter, CAPTRUST Financial Advisor Drew McCorkle assesses the latest legislation and litigation pertinent to the fiduciary responsibilities of retirement plan sponsors. In this quarter's review, you'll find insights on the Supreme Court's ruling concerning prohibited transaction claims, a Presidential Action aimed at banning retirement plan investments in companies deemed foreign adversaries, an unusual ERISA jury verdict, and additional key updates.

Source: Captrust.com, May 2025

ERISA Fidelity Bonds: Myth Busting Five Common Misconceptions

Fidelity bonds are essential for protecting employee benefit plans against financial wrongdoing, as they cover first-dollar losses without a deductible. ERISA mandates that most retirement plans maintain such coverage, regardless of participant count or asset value. However, misconceptions about these bonds can create compliance challenges for plan sponsors. This article seeks to clarify common myths about ERISA fidelity bonds and guide sponsors toward ensuring compliance.

Source: Bdo.com, May 2025

Trends in ERISA Litigation: What Plan Sponsors Should Consider Now

This article focuses on five trends in ERISA litigation that plan sponsors should consider in their risk mitigation efforts: Forfeiture Accounts, Health Plan Fee Litigation, SECURE 3.0?, Health Plan Cost and Fee Transparency, and Health Plan Regulation.

Source: Barran.com, May 2025

Extending Retirement by 5 Years Skyrockets Chance of Depleting Retirement Savings

New research from Nationwide and The American College of Financial Services highlights a significant risk associated with extending retirement by just five years: it increases the likelihood of depleting savings by 41%, especially among healthy, higher-income retirees. This concern is further emphasized by Allianz Life's 2025 Annual Retirement Study, which found that 64% of Americans are more afraid of running out of money than dying. The study reveals a disconnect between rising lifespans, which now often exceed 90 years, and inadequate financial planning, leading many to face an increasing risk of outliving their savings.

Source: 401kspecialistmag.com, May 2025

Where Will the Trump Admin Take Retirement Policy?

At the NAPA 401k Summit in Las Vegas, ARA CEO Brian Graff posed a question to former Assistant Secretary for Labor for the Employee Benefits Security Administration, Preston Rutledge, about the extent of White House involvement in ERISA matters. Rutledge confirmed, "When it comes to 401ks? Yes, he genuinely cares about them." He noted that the key players in the White House, particularly within the National Economic Council led by Kevin Hassett, are actively engaged in these issues. Graff further inquired whether the fiduciary rule would be a priority for the department. Rutledge affirmed, "It will indeed be a priority. The real question is how they choose to approach it."

Source: Psca.org, May 2025*

How Fiduciary Duty and Cognitive Decline Intersect

Plan sponsors have a fiduciary duty to protect participants and their retirement assets, a responsibility that becomes particularly challenging as workers face cognitive decline in later years. The National Institutes of Health projects a significant increase in dementia cases, with 42% of Americans over 55 expected to develop dementia by 2060, and two-thirds experiencing cognitive impairment by age 70. Compounding this issue, the Federal Trade Commission reported that U.S. consumers lost over $12.5 billion to fraud in 2024, a 25% increase from the previous year. As more participants retain their assets in their plans after retirement or job termination, plan sponsors must navigate the complexities of safeguarding these assets, especially for individuals who may be vulnerable to cognitive impairments and financial fraud.

Source: Plansponsor.com, May 2025

Supreme Court Declines to Hear AT&T ERISA Case

The U.S. Supreme Court declined to hear AT&T's appeal regarding a prohibited transaction in a defined contribution plan, allowing the case Bugielski et al. v. AT&T Services Inc. et al. to return to the district court for further proceedings. The case, which focuses on prohibited transactions under ERISA, has been in litigation since 2017. Several industry groups had submitted an amicus brief requesting the Supreme Court to take up the appeal, but the justices did not comment on their decision.

Source: Planadviser.com, May 2025

GOP House Bills Target DOL Audit Process

Two bills proposed by Republican representatives in the U.S. House aim to increase transparency regarding Department of Labor audits. Representative Lisa McClain introduced the Employee Benefit Security Administration Investigations Transparency Act, which mandates annual reports to Congress on the status of DOL audits and ongoing investigations over 36 months. Additionally, Representative Michael Rulli's bill requires the EBSA to report annually on "adverse interest agreements." Both measures seek to amend the Employee Retirement Income Security Act of 1974 to enhance oversight of investigations.

Source: Planadviser.com, May 2025

How 401k Auto Portability Boosts Women's Retirement Savings

Income inequality significantly affects women's financial security, particularly regarding retirement benefits. In 2023, women earned, on average, 21.8% less than men, according to the Economic Policy Institute. A 2024 study by the TIAA Institute and Ipsos further revealed that women typically retire two years earlier, live three years longer, and have 30% less retirement income than their male counterparts, highlighting a critical disparity in financial preparedness for retirement. But, the Auto Portability Simulation by Retirement Clearinghouse suggests that if auto portability is widely adopted by retirement plan sponsors and recordkeepers, it could help preserve the retirement savings of 2 million women annually. Over a generation, this could lead to 111 million women preserving $753 billion in retirement savings in the U.S. system.

Source: Kiplinger.com, May 2025

UWM Faces Class-Action Lawsuit Over Alleged Misuse of 401k Plan Assets

United Wholesale Mortgage is facing a class-action lawsuit in a Michigan district court, alleging misuse of assets in its 401k retirement plan. The suit claims UWM violated ERISA by using plan assets to offset future employer contributions instead of addressing plan expenses. Allegations include breaches of fiduciary duties and violations of ERISA's prohibited transaction rules. UWM has dismissed the claims as "baseless," stating that it is among many publicly traded companies challenged by similar lawsuits regarding 401k plan practices.

Source: Housingwire.com, May 2025

New VFCP on Late Deposits

The issue of timely deferral deposits remains a contentious topic in the industry, largely due to the vague language used in regulations that leaves room for interpretation. According to DOL Regulation, deferral deposits should be made at the "earliest" reasonable time but must be completed by the fifteenth business day following the month of withholding. This regulation also applies to loan repayments withheld from employee pay. After discussions with regulators, it appears that most pension professionals avoid delaying deposits until the mandated deadline. However, the debate continues regarding whether there can be some flexibility for late deposits.

Source: Belfint.com, May 2025

Retirement Savings for Americans Act Reintroduced, Again

Senators John Hickenlooper and Thom Tillis and Representatives Lloyd Smucker and Terri Sewell have introduced the Retirement Savings for Americans Act of 2025. This is the third time the RSAA has been introduced, having previously been introduced in the last two sessions of Congress.

Source: Ascensus.com, May 2025

Unanimous Supreme Court Decision Makes It Easier for Prohibited Transaction Claims to Survive a Motion to Dismiss

Lawsuits against retirement plans for allegedly overpaying service providers, like recordkeepers, continue to rise. Previously, some courts required plaintiffs to provide detailed allegations that the arrangement was improper or involved unreasonable compensation. However, on April 17, 2025, the U.S. Supreme Court's unanimous ruling in Cunningham v. Cornell University determined that these requirements were too stringent. This new permissive pleading standard could lead to an increase in excessive fee litigation.

Source: Winston.com, May 2025

Supreme Court Decision on Prohibited Transactions Will Increase ERISA Lawsuits, DC Plan Costs

The retirement industry criticized the recent unanimous Supreme Court ruling in Cunningham et al. v. Cornell University et al., arguing that it will lead to increased lawsuits, higher costs for retirement plans, and stifle innovation in plan design. Trade groups expressed concern that the decision encourages litigation against plan fiduciaries for engaging service providers at reasonable fees, which is allowed under ERISA. They stated that only Congressional action can amend ERISA to address the legal complexities regarding prohibited transactions and their exemptions. Tim Rouse, executive director of the SPARK Institute, emphasized that the ruling could burden fiduciaries unnecessarily.

Source: Wagnerlawgroup.com, May 2025

Supreme Court Addresses Prohibited Transaction Lawsuits

In the case of Cunningham v. Cornell University, participants in the university's 403b plan contended that they should not have to prove that certain exemptions to ERISA's prohibited transaction rules do not apply when alleging excessive recordkeeping fees. The U.S. Supreme Court unanimously sided with the plan participants, making it easier for them to sue retirement plans over routine transactions with service providers.

Source: Segalco.com, May 2025

DOL Updates Voluntary Fiduciary Correction Program to Add a New Self-Correction Option

The DOL has updated its Voluntary Fiduciary Correction Program to introduce a new Self-Correction Component. This allows plan sponsors and fiduciaries to self-correct certain prohibited transactions, such as delinquent contributions and loan repayments, without submitting a full VFCP application, under specific circumstances. They can do this by providing a notice and required information to the DOL. Additionally, the DOL has amended the related Prohibited Transaction Exemption to broaden the excise tax relief available for transactions corrected under the SCC.

Source: Robertsandholland.com, May 2025

Investment Menus: What to Expect from Your Retirement Plan Investment Advisor

As a plan sponsor, a key responsibility -- perhaps the most critical one -- is ensuring that your organization's retirement plan is subject to adequate investment oversight. However, how can you determine whether your investment advisor is meeting the expected standards of service? This article highlights the essential functions of investment advisors and identifies potential red flags to watch for.

Source: Retirementplanology.com, May 2025

How Does Your 401k Plan Stack up Against the Industry?

The ninth annual 401k Plan Benchmark Report by Judy Diamond Associates highlights the performance of 401k plans in 2023, showcasing both high and low performers across various industries and company sizes. The top five industries with the best 401k plans include financial advice/investment activities, certified public accountants, legal services, financial and insurance services, and engineering. The report analyzed around 640,000 active 401k plans with minimum asset levels, representing about 74 million eligible workers and $8 trillion in assets across 27 industry categories. The data is derived from Form 5500 filings for the 2023 plan year, reflecting the latest available information.

Source: Napa-net.org, May 2025

Rolling Over Your Roth 401k? Here are Four Must-Know Moves

Should you keep your Roth 401k assets in a Roth 401k or move it to your Roth IRA? While rolling over a traditional 401k account has its quirks, rolling over a Roth 401k comes with a unique set of rules. This article highlights some key considerations to keep in mind when rolling over a Roth 401k.

Source: Morningstar.com, April 2025

The Supreme Court Relieves ERISA Plaintiffs of a Pleading Requirement: What's Next for ERISA Plan Fiduciaries?

On April 17, 2025, the U.S. Supreme Court unanimously ruled in Cunningham v. Cornell University that plaintiffs alleging prohibited transactions under ERISA are not required to plead facts showing that exemptions to prohibited transactions do not apply. This decision resolved a conflict among appellate courts and overturned the Second Circuit's dismissal of a similar claim, making it easier for plaintiffs to bring prohibited transaction claims against benefit plan fiduciaries.

Source: Littler.com, April 2025

Kaleda Comments on Fiduciary Responsibility

David Kaleda, principal at Groom, stresses the importance of fiduciaries staying vigilant and proactive in fulfilling their responsibilities during times of market volatility. He explains, "Market fluctuations often lead participants to have numerous questions and concerns, which can be alleviated through effective communication and a strong investment education strategy."

Source: Groom.com, April 2025

401k AI Fiduciary Traps Spark ERISA Questions

Plan sponsors and service providers shouldn't expect AI tools to create 401k miracles without careful due diligence. Relying on AI for 401k administration can be risky. AI can improve efficiency and personalize services, but it also poses fiduciary traps, such as compliance risks from biased or inaccurate outputs. The key is balance: AI offers benefits but requires rigorous oversight to prevent costly fiduciary errors.

Source: Fiduciarynews.com, April 2025

Supreme Court Establishes Lower Pleading Standard for Prohibited Transaction Claims

The U.S. Supreme Court, in a unanimous decision in Cunningham v. Cornell University, held that plaintiffs alleging prohibited party-in-interest transactions under ERISA section 406(a) do not need to allege facts disproving available statutory exemptions (like reasonable compensation for necessary services) to survive a motion to dismiss. This means such claims can proceed even if fiduciary breach claims based on the same conduct would fail. To address the potential for frivolous claims advancing to discovery, the Court provided guidance to district courts on ways to mitigate these risks.

Source: Erisapracticecenter.com, April 2025

Missing Participants

When a company sponsors a 401k plan, it can help attract top talent, retain employees, and improve morale. However, after an employee leaves, the plan administrator is still responsible for delivering plan notices and communications until the participant's account is fully paid out. This ongoing obligation can be frustrating when participants become unresponsive or difficult to locate, as fiduciary duties require continued efforts to find and engage them. This article reviews some effective best practices to minimize and address the challenges posed by missing or nonresponsive participants.

Source: Consultrms.com, April 2025

Uncashed Distribution Checks

Uncashed distribution checks pose a growing fiduciary risk and administrative burden for qualified plan sponsors, especially as small-balance and separated participant accounts increase. These uncashed checks remain plan assets until cashed or resolved, with balances returning to participant accounts after 180 days, potentially triggering additional plan audits. Plan administrators should proactively minimize uncashed checks and address unresolved cases to reduce costs and compliance risks. This article reviews the issue and offers suggestions to minimize it.

Source: Consultrms.com, April 2025

Supreme Court's Cornell Decision Has Broad Implications for ERISA Litigation

On April 17, the Supreme Court issued its decision in Cunningham v. Cornell University, which will affect many plan sponsors with similar service arrangements. The Court set a very low standard for surviving a motion to dismiss, potentially encouraging meritless lawsuits. To address this, the Court suggested that district judges could impose safeguards -- such as requesting reply briefs and sanctions -- but these could be applied inconsistently at judges' discretion. As a result, more meritless claims are likely to survive initial dismissal, leading to increased settlements by defendants.

Source: Cohenbuckmann.com, April 2025

Two Approaches to the Roth Catch-Up Mandate: Implications for Plan Sponsors

The SECURE 2.0 Act's Section 603, effective January 1, 2026, requires employees earning above a certain threshold (originally $145,000) to make catch-up contributions only as Roth (after-tax) contributions rather than pre-tax. This new "Roth catch-up mandate" is prompting DC plan sponsors to reconsider their current catch-up contribution methods, typically either a separate election or single election approach, as each has advantages and disadvantages affected by this change. Both methods are reviewed here.

Source: Alight.com, April 2025

Supreme Court Endorses Plaintiff-Friendly Prohibited Transaction Pleading Standard

On April 17, 2025, the Supreme Court resolved a circuit split regarding the proper pleading standard for a particular type of prohibited transaction claim under ERISA. Although this ruling may seem technical, it carries substantial practical implications. The Court's decision makes it easier for plaintiffs to bring claims and more difficult for defendants, such as plans and plan sponsors, to have these claims dismissed early in litigation. This article reviews the case -- Cunningham v. Cornell University -- and highlights key takeaways for plan sponsors.

Source: Venable.com, April 2025

Supreme Court Lowers Hurdles for ERISA Plaintiffs but Highlights Tools to Stop Meritless Claims

Last week, the U.S. Supreme Court issued its decision in Cunningham v. Cornell University, easing the standard for pleading prohibited transaction claims under ERISA. The ruling permits claims to move forward based simply on allegations that an ERISA plan engaged in a transaction with a third party, regardless of whether the transaction appears harmless or even advantageous. However, while the Court broadened the scope for such claims, it also urged district courts to adopt innovative methods to promptly dismiss meritless cases.

Source: Sidley.com, April 2025

Supreme Court Sides With Plan Participants: Pleading Standards for Prohibited Transaction Claims

On April 17th, the U.S. Supreme Court unanimously ruled in Cunningham v. Cornell that plaintiffs in ERISA excessive fee cases only need to plausibly allege that a plan fiduciary engaged in a prohibited transaction. The Court clarified that the burden does not lie with plaintiffs to prove that ERISA's Section 408 exemptions (like fee reasonableness) do not apply. Instead, the Court held that these exemptions are affirmative defenses, so plan fiduciaries must bear the burden of proving that the exemption applies. This decision reversed the Second Circuit's prior ruling in the case.

Source: Sgrlaw.com, April 2025*

National Survey Reveals Growing Demand for Access to Nasdaq-100 Index in 401k Plans

The Annual Nasdaq-100® Retirement Plan Survey found that nearly 80% of 401k participants see the value of including Nasdaq-100 products in their investment options, highlighting a growing market opportunity. Surveying 1,000 participants aligned with 2023 U.S. Census demographics, revealed strong demand for the tech-focused Nasdaq-100 Index, which has a 40-year track record and over $300 billion in assets.

Source: Prnewswire.com, April 2025

Retirement Confidence Remains High, As Does Interest in Income Options

The 2025 Retirement Confidence Survey by the Employee Benefit Research Institute and Greenwald Research found that most American workers (67%) and retirees (78%) feel confident about living comfortably in retirement. The survey, conducted from January 2 to February 3 with 2,767 participants, revealed that retiree confidence rose by four percentage points compared to last year, while worker confidence decreased slightly by one percentage point. Both groups remain concerned about inflation and potential Social Security cuts.

Source: Planadviser.com, April 2025

Questions About Service Provider Selection Stem From Pentegra MEP Case

A jury awarded over $38 million to more than 26,000 participants in Pentegra's multiple employer plan after finding that the plan's fiduciaries breached their duties under ERISA. The case, Khan et al v. Board of Directors of Pentegra Defined Contribution Plan et al., filed in September 2020, centered on allegations that the fiduciaries paid unreasonable recordkeeping and administrative fees by retaining Pentegra Services Inc., a provider affiliated with the plan sponsor. Despite attempts to dismiss the lawsuit, the court allowed it to proceed, highlighting concerns over working with related service providers and ensuring fees are reasonable for plan participants.

Source: Planadviser.com, April 2025

Senator Cassidy Proposes Workplace Benefits for Independent Workers

Senator Bill Cassidy, chairman of the Senate Health, Education, Labor and Pensions Committee, released a white paper titled "Portable Benefits" proposing ways to provide workplace benefits to independent workers. His proposals include allowing banks to create escrow or suspension accounts to manage the irregular incomes of independent workers and enabling companies or trade associations to establish Pooled Employer Plans and Safe Harbor 401k Plans for these workers. These plans could automatically enroll workers, provide guidance, and do so without creating an employment relationship that would affect their independent status.

Source: Planadviser.com, April 2025

Supreme Court Wants Solicitor General Opinion on Excessive Fee 401k Case

The U.S. Supreme Court has requested the U.S. solicitor general's input on a 401k excessive fee lawsuit against The Home Depot Inc. The case involves a legal conflict between circuit courts about who bears the burden of proof in such cases. The 10th and 11th Circuits place the burden on plan participants, while the 1st, 4th, 5th, and 8th Circuits, along with the DOL under the Biden administration, rule that once a plaintiff shows a fiduciary breach and loss under ERISA, the burden shifts to the fiduciary. The Supreme Court invited Solicitor General John Sauer to submit a brief expressing the U.S. government's views, without setting a deadline.

Source: Planadviser.com, April 2025

Jury Slaps Pentegra with $39 Million in Damages in MEP Excessive Fee Suit

Plaintiffs represented by Schlichter Bogard LLC won a substantial jury award in Khan v. Bd. of Directors of Pentegra Defined Contribution Plan, a case alleging excessive fees in a multiple employer plan. The suit claimed that the defendants, instead of leveraging the plan's bargaining power for participants' benefit, enriched themselves and Pentegra by allowing unreasonably high administrative fees to be charged to plan participants.

Source: Napa-net.org, April 2025

Cunningham v. Cornell: Supreme Court Lowers Bar for ERISA 406(a) Claims

On April 17, 2025, the Supreme Court ruled in Cunningham v. Cornell University that to state a claim under ERISA section 406(a), plaintiffs only need to allege the elements of section 406(a) itself. Previously, courts were divided on whether plaintiffs also had to allege that section 408's exemptions did not apply. The Court clarified that section 408's exemptions are affirmative defenses for defendants to prove, not requirements for plaintiffs to allege. This ruling makes it easier for plaintiffs to overcome early dismissals, proceed to discovery, and potentially reach settlements in section 406(a) prohibited transaction claims, likely leading to an increase in related lawsuits involving 401k and employee stock ownership plans.

Source: Groom.com, April 2025

Mandatory Automatic Enrollment Guidance

The proposed regulations address many of our questions regarding the mandatory automatic enrollment effective January 1, 2025. With this new guidance, it is essential to ensure that affected plans are applying a good-faith interpretation accordingly. This is an overview of the new Mandatory Automatic Enrollment regs.

Source: Consultrms.com, April 2025

Asset Rich but Cybersecurity Poor?

Many retirement plan sponsors are still unaware that, as ERISA fiduciaries, they have a responsibility to address and mitigate cybersecurity risks to the retirement plan. Ignoring the overlap between fiduciary duties and cybersecurity obligations can lead to serious consequences. This article provides important reminders and practical protection strategies that are relevant for plan sponsors, including those from small businesses.

Source: Colonialsurety.com, April 2025

IRS Proposes Changes to 401k Catch-Up Contributions

In January 2025, the IRS issued proposed regulations addressing "catch-up" contributions under the SECURE 2.0 Act of 2022. These changes affect employees age 50 or older who make additional elective deferrals to 401k plans. This article outlines key information plan sponsors and fiduciaries need to understand about these proposed IRS updates.

Source: Alston.com, April 2025

Whole Foods Reaches Settlement in Excessive Fee Case

The parties in an excessive fee lawsuit involving the nearly $2 billion Whole Foods Market Growing Your Future 401k Plan have reached a settlement agreement. The participant-plaintiffs, represented by Capozzi Adler PC, had alleged that the plan's large size should have allowed for better fee arrangements and that failing to secure them constituted a breach of fiduciary duty. Following mediation on April 16, 2025, the parties agreed in principle to resolve the case.

Source: Psca.org, April 2025

401k Hardship Withdrawal Rules

If you're experiencing financial hardship, you may be able to access your 401k funds, but doing so can impact your long-term financial future. Starting in 2025, updated rules offer more flexibility, including penalty-free withdrawals for emergencies and protections for domestic abuse victims. Some plans allow quicker access through self-certification, though not all employers provide these options. It's important to understand when hardship withdrawals are allowed, how they operate, and the recent changes.

Source: Myubiquity.com, April 2025

The Supreme Court Delivers Troubling Decision for ERISA Excess Fee Cases

On April 17, 2025, the U.S. Supreme Court issued a unanimous ruling making it harder for defendants to dismiss excess fee cases involving 401k or 403b plans at early litigation stages, potentially leading to more costly and burdensome discovery processes. While the Court recognized this could raise litigation costs for employers, it suggested some alternative measures for lower courts to filter out meritless cases, though these measures are not widely used and their adoption remains uncertain. Consequently, the ruling may increase litigation expenses for plan sponsors and could also drive up fiduciary liability insurance premiums, even for plans not currently facing excess fee claims.

Source: Ktslaw.com, April 2025

The Choices You Make That Can Land You in Trouble as a 401k Plan Sponsor

The author draws a parallel between life being shaped by our choices -- like in "Choose Your Own Adventure" books or the latest Mission Impossible trailer -- and the decisions made by 401k plan sponsors. He warns that many sponsors may face problems later due to past choices in plan design and providers, potentially leading to negative consequences.

Source: Jdsupra.com, April 2025

High Court's Cornell Ruling Stands to Supercharge 401k Suits

William Delany, principal, and co-chair of the Groom's litigation group, was featured in this Bloomberg Law article discussing the Supreme Court's Cornell ruling. He highlighted that without proactive measures and legislative action, plan sponsors, service providers, and regulated entities could face overwhelming ERISA litigation, hindering innovation in the retirement plan industry.

Source: Groom.com, April 2025

401k AI Fee Benchmarking Saves Plan Sponsors

As a 401k plan sponsor, signing provider contracts without fully understanding fees can be risky, especially as litigation over excessive fees has surged 35% in 2024. Many sponsors, overwhelmed by marketing jargon, overlook the hidden costs that can harm plan participants and potentially violate ERISA regulations. 401k AI fee benchmarking offers a powerful solution, providing clear, precise fee comparisons that help sponsors fulfill their fiduciary duties and avoid legal trouble. Despite its benefits, many plan sponsors aren't demanding this tool from providers, risking high fees and regulatory penalties. Adopting AI-driven benchmarking can transform unclear fee structures into transparent, compliant plans that protect both sponsors and participants.

Source: Fiduciarynews.com, April 2025

The Cornell Supreme Court Decision Sanctions ERISA Fiduciary-Breach Lawsuits Without Proof of Wrongdoing

Jerome Schlichter, a leading figure in excessive fee ERISA class action lawsuits, has achieved three unanimous U.S. Supreme Court victories in cases against Intel, Northwestern University, and Cornell University, with no justice ever ruling against his novel fiduciary liability theories. However, according to the article's author, his latest case against Cornell has pushed excessive fee litigation to an extreme by securing a ruling that allows filing ERISA-prohibited transaction claims with minimal allegations -- simply that a plan contracted a service provider -- without needing any proof of wrongdoing or excessive fees. This contrasts with breach-of-fiduciary duty claims, which require a higher level of evidence.

Source: Encorefiduciary.com, April 2025

Confused About Retirement Plan Outsourcing?

Retirement plan sponsors often outsource services to focus on core business and gain expertise. However, outsourcing does not relieve ERISA fiduciaries -- such as plan sponsors and committee members -- of their legal responsibilities and liabilities for the plan. While outsourcing may reduce administrative burdens, fiduciaries still retain responsibility for decisions and must manage their personal risks accordingly.

Source: Colonialsurety.com, April 2025

More Discretion, More Documentation: Recovering Overpayments Under Secure 2.0

Under SECURE 2.0, plan sponsors can decide whether to recoup inadvertent benefit overpayments but are no longer required to do so. However, they must document and monitor their decision-making process to fulfill fiduciary duties. Maintaining a consistent process for handling and recording all overpayment decisions helps ensure proper oversight and simplifies audits.

Source: Brickergraydon.com, April 2025

How Bell Canada Incorporated Plan Sponsor Guidance Into DC Plan Design

In the early days of Bell Canada's $3-billion defined contribution plan, there was a strong focus on information and campaigns, but employers were hesitant to get deeply involved, leaving members without much guidance. Initially, members didn't have to contribute to receive a 4% company match, which could increase to 6% if members contributed up to 12%. The default investment was a very conservative money-market fund. Before 2016, this lack of direction often led to inaction and poor results. To improve outcomes, Bell Canada introduced a default contribution requirement of at least 2%, with a maximum 6% company match, and shifted to a lifecycle fund as the default investment, aiming to better support members' accumulation and long-term retirement planning.

Source: Benefitscanada.com, April 2025

U.S. Chamber Weighs in on 401k Excessive Fee Suit

The U.S. Chamber of Commerce and retirement trade associations have supported fiduciary defendants in a recent excessive fee ERISA class-action suit, describing it as part of a broader trend aimed at securing costly settlements. In the case against Telephone and Data Systems, Inc. Tax Deferred Savings Plan, the court dismissed the suit, with Judge Rebecca Ebinger ruling that the plaintiffs failed to allege specific, identifiable breaches of fiduciary duty. Instead, the plaintiffs only pointed to lower expenses in other plans to infer a possible breach, which was insufficient to proceed.

Source: Asppa-net.org, April 2025

Supreme Court Lowers Bar to Pleading Prohibited Transactions, Despite "Serious Concerns" of Meritless Litigation

In a unanimous decision reversing the dismissal of claims related to fees paid to defined contribution plan recordkeepers, the Supreme Court ruled that ERISA's prohibited transaction exemptions are affirmative defenses. Therefore, plaintiffs are not required to include these exemptions in their initial pleadings to state a valid claim. Although the Court recognized that this ruling might enable some plaintiffs to overcome dismissal with minimal allegations, it determined that concerns about a potential rise in meritless lawsuits do not outweigh the clear language and framework of the statute.

Source: Seyfarth.com, April 2025*

Supremes Back Plaintiffs in Cornell ERISA Burden of Proof Standard

The U.S. Supreme Court ruled unanimously in favor of retirement plan participants who sued Cornell University over excessive fees in its 403b plan. The decision clarified that under ERISA, plan fiduciaries must both plead and prove exemptions to prohibited transactions. Additionally, plaintiffs challenging such transactions do not need to specify whether statutory exemptions apply in their complaints, marking a significant win for employees.

Source: Napa-net.org, April 2025

2026 401k Contribution Limit on Track for $1,000 Increase: Milliman

The maximum 401k contribution limit, currently $23,500 for 2025, is projected to increase by $1,000 to $24,500 in 2026, according to Milliman's latest IRS limits forecast. This forecast, based on Consumer Price Index data, predicts the annual adjustment that the IRS typically announces in late fall.

Source: 401kspecialistmag.com, April 2025

Employers With PEPs Have Higher Adviser and Plan Satisfaction

A study by The Standard found that 83% of employers are satisfied with their Pooled Employer Plan. Additionally, plan sponsors reported a 40% increase in satisfaction with their advisers after joining the PEP. Conducted through an online survey of 300 mid-sized U.S. companies from January 3 to January 26, the research indicated a 26% rise in satisfaction with retirement plans, attributed to easier management and reduced costs.

Source: Planadviser.com, April 2025

DOL Gets 60 More Days to Decide Next Steps in Fiduciary Rule Lawsuit

U.S. Circuit Judge Catharina Haynes of the 5th Circuit Court of Appeals has granted the Department of Labor an additional 60 days to consider its options regarding two court cases challenging the 2024 Retirement Security Rule. This extension, which moves the deadline to June 16, 2025, was approved as the DOL requested more time to adapt to changes in presidential administration and to allow new DOL leadership to understand the litigation issues. The motion for the extension was unopposed.

Source: Planadviser.com, April 2025

American Worker Retirement Plan Act Reintroduced in House

Representative Lloyd Smucker reintroduced the Retirement Savings for Americans Act on April 7. The proposed legislation aims to provide federally run retirement savings accounts for low- and middle-income workers who lack access to employer-sponsored plans. If enacted, the Department of the Treasury would manage the program, offering matching contributions of up to 5%, consisting of a 1% automatic contribution and a tax credit match of up to 4%, phased out at the national median income level. Eligible workers would be automatically enrolled at 3% of their income, with the option to opt out or increase contributions. The program is designed to function similarly to existing automatic individual retirement account programs in 20 states.

Source: Planadviser.com, April 2025

Case of the Week: Embezzlement -- Are Plan Assets Safe?

The ERISA consultants at the Retirement Learning Center responded to a financial advisor's inquiry regarding whether a business owner could use a terminated employee's 401k plan balance to compensate for losses caused by that employee's embezzlement. This scenario reflects a broader concern about 401k plan embezzlement and the legality of accessing a former employee's retirement funds to alleviate business losses. The question highlights the complexities surrounding 401k plan balances and the implications of employee theft on a business's finances.

Source: Napa-net.org, April 2025

Be Choosy When Picking Your 401k Plan's TPA

The author, an ERISA attorney since 1998, gained valuable insights by working as a staff attorney for a third-party administrator, which provided a unique perspective on the retirement industry. Over nine years, he observed various aspects of the business, enabling them to offer informed advice to plan sponsors and retirement plan providers. In the article, he shares experiences and cautionary tales, offering guidance on what plan sponsors should avoid when selecting a TPA.

Source: Jdsupra.com, April 2025

Building Effective Participant Communications

Effective plan communication serves as a key opportunity to address design gaps and reinforce the benefits of a diversified investment menu. By implementing a human-centered communications program, you can enhance participant engagement and promote positive behavior changes. This approach emphasizes a comprehensive communication journey, guiding participants through expectations and avoiding overwhelming them with isolated information. Ultimately, fostering trust through consistent and transparent communication encourages participants to take confident action toward their retirement goals.

Source: Blackrock.com, April 2025

Facing a Chaotic Market: Reminders and Recommendations for Retirement Plan Fiduciaries

In today's volatile markets, it's crucial to review your 401k fiduciary process to ensure that both you and your employees are making sound decisions in compliance with ERISA regulations. When the markets are performing well, participants often neglect underlying structural issues within the plan, focusing instead on growing their account balances. Conversely, during downturns, participants -- particularly those approaching retirement -- may seek to address potential shortcomings in the retirement plan to recover from market losses. Keeping this in mind, here are five strategies to safeguard yourself and your retirement plan.

Source: Barran.com, April 2025

401k Loan Size Ticks Up for 2024

According to a benchmarking report by T. Rowe Price, the average size of 401k loans increased to $10,250 in 2024, reflecting a 4% rise that slightly outpaced inflation. The report indicates that participants across all age groups, especially those nearing retirement, have increased their loan amounts. Specifically, 11% of respondents over 70 and 10% of those aged 65-69 reported larger loans, compared to 9% for those aged 20-29 and 4% for ages 30-39. Overall, retirement plan loan usage has risen by two percentage points since 2023 but remains lower than the peaks seen from 2015 to 2019.

Source: 401kspecialistmag.com, April 2025

Former Employees Can Lose Thousands to Hidden 401k Fees

A new analysis by PensionBee reveals that individuals who leave their jobs without managing their 401k accounts may incur significant hidden fees, potentially totaling up to $18,000 in account maintenance costs. When employees exit a company, their former employers may start charging fees previously covered by the organization. This situation is compared to COBRA insurance, which allows former employees to maintain their health insurance at a cost, but unlike COBRA, individuals are not informed about these fee changes upon leaving their jobs.

Source: 401kspecialistmag.com, April 2025

Report Finds TDFs are Popular, but Misunderstood

A report from the Public Research Retirement Lab found that target-date funds are more favored among younger retirement investors compared to other investment types. However, it also noted that TDFs may not be well understood by the general public. The PRRL, a collaboration between the Employee Benefits Research Institute and the National Association of Government Defined Contribution Administrators, analyzed a sample of 2.3 million participants with total assets of $148 billion, categorizing investments into 14 groups.

Source: Psca.org, April 2025

U.S. Chamber Pushes Back on 401k Excessive Fee Suit Appeal

The U.S. Chamber of Commerce and several retirement trade associations defended fiduciary defendants in a recent excessive fee lawsuit, claiming it is part of a larger trend of ERISA class-action complaints seeking costly settlements. Judge Rebecca Ebinger dismissed the lawsuit last November, stating the plaintiffs failed to provide proper benchmarks for comparing expenses, which hindered their claims of breached fiduciary duties. The plaintiffs have since appealed the dismissal.

Source: Napa-net.org, April 2025

DOL Must Issue ERISA Guidance on "Foreign Adversary" Investments

On February 21, a presidential memorandum instructed the DOL to update ERISA fiduciary standards regarding investments in public market securities from "foreign adversary companies." This directive is part of the Trump administration's America First Investment Policy, which seeks to promote foreign investment while safeguarding national security. The article discusses potential questions that sponsors and fiduciaries of defined benefit and defined contribution plans, as well as welfare plans like VEBAs, may have regarding the upcoming guidance, though it notes that no immediate action is required from them at this time.

Source: Mercer.com, April 2025

Report Raises Eyebrows About Claims of Rampant "Red Flags" in Retirement Plans

An expert criticized a recent analysis highlighting extensive ERISA noncompliance as "scaremongering." In January, the New York-based consulting firm Abernathy Daley released a report claiming that approximately 84% of U.S. retirement plans exhibited at least one "red flag" indicative of a potential violation of ERISA. However, some industry professionals have disputed the firm's assertions regarding the prevalence of compliance risks.

Source: Hrdive.com, April 2025

401k Plan Sponsor Questions Most Forget to Ask

Many questions about 401k plans often go unasked, even though the sponsors of these plans have important responsibilities to manage them properly. By asking these important questions ahead of time, sponsors can help improve the financial security of the people who participate in the plan and also protect themselves from any risks that come from not fulfilling their duties.

Source: Fiduciarynews.com, April 2025

Unlocking the Hidden Power of 401k Contributions: A Tax Bracket Advantage

While most people associate their 401k with retirement savings, employer matching, and tax deferral, there's a significant benefit for high earners and business owners: the opportunity to utilize marginal tax brackets through 401k contributions. This article highlights the importance of understanding the 401k salary deferral option, emphasizing that it's not just about future savings but also about maximizing current tax benefits to efficiently build wealth in line with today's tax code.

Source: Bluerockfg.com, April 2025

Will the Average Retirement Age Keep Rising?

After nearly a century of decline, work participation among older men stabilized in the 1980s, and since the early 1990s, the average retirement age has risen by approximately three years. The question now is whether the factors that contributed to this increase over the past three decades will continue to extend the retirement age, or if their impact has largely played out. The final section of this piece argues that the influences driving higher participation rates among older workers may be reaching their limits, indicating that further increases in the average retirement age are unlikely.

Source: Bc.edu, April 2025

Cybersecurity and 401k Plans: Top Priority for Plan Sponsors in 2025

Cybersecurity has become an essential fiduciary obligation for 401k plan sponsors, evolving beyond a mere IT issue. With the rise of sophisticated cyber threats targeting valuable retirement accounts, employers must proactively protect participant assets and sensitive information. Fiduciaries are now required to ensure the security of these assets with the same prudence, care, and diligence as other financial responsibilities.

Source: Savantwealth.com, April 2025

The Rising Popularity of Roth 401ks: What Plan Sponsors Need to Know

Offering a Roth 401k option is beneficial for plan sponsors and can aid employees in retirement preparation. However, education is crucial for employees to comprehend the differences between traditional and Roth contributions and how these choices fit their long-term goals and financial situations. Providing educational resources, calculators, and access to financial professionals can help participants make informed decisions.

Source: Savantwealth.com, April 2025*

Senators Introduce Bill to Protect Retirement Savings in Bankruptcy

Senators Josh Hawley and Dick Durbin have reintroduced the Protecting Employees and Retirees in Business Bankruptcies Act, aimed at enhancing protections for employee wages and retirement assets during employer bankruptcy filings. Hawley emphasized that the legislation would help employees retain more of their wages, benefits, and retirement savings in such situations. The bill has been referred to the Senate Committee on the Judiciary and is pending a vote.

Source: Psca.org, April 2025

The DOL's Lost and Found Database Is Live

The DOL has developed a database as part of SECURE 2.0 to assist in locating missing retirement plan participants and beneficiaries. This initiative aims to address the ongoing issue of missing participants, which is a key focus for both the DOL and the IRS. While participation in the database is voluntary for plan sponsors, it can serve as additional evidence that they are fulfilling their fiduciary duty to locate eligible participants for benefits.

Source: Brickergraydon.com, April 2025

Proposal for a Federal Retirement Plan for Private-Sector Workers Reintroduced

The Retirement Savings for Americans Act is a bicameral, bipartisan bill reintroduced by Rep. Lloyd Smucker on April 7. It aims to provide uncovered private-sector workers access to a federally run retirement plan, featuring matching contributions for low- and middle-income participants. While supporters believe the RSAA could enhance retirement outcomes, critics argue it may weaken the private retirement system by reducing employers' incentives to sponsor their own retirement plans.

Source: Asppa-net.org, April 2025

IRA Bankruptcy Exemption Increases

Effective April 1, 2025, the maximum bankruptcy exemption for IRAs will increase from $1,512,350 to $1,711,975. This amount will be adjusted for cost-of-living increases and reflects an increase from the original limit of $1,000,000 set by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Source: Ascensus.com, April 2025

Best Practices to Find Missing Plan Participants

Employers face the ongoing challenge of locating missing retirement plan participants, a responsibility mandated by ERISA. Whether managing a defined contribution or defined benefit pension plan, employers have a fiduciary duty to find these individuals. The DOL has been actively addressing this issue, conducting audits of retirement plans and outlining necessary actions for employers to locate lost participants and ensure they receive their benefits. They have provided detailed guidance on steps that should be taken to effectively find missing participants.

Source: Usicg.com, April 2025

Court Finds American Airlines Liable for Breach of Fiduciary Duty of Loyalty to Its 401k Plans

In the case of Spence v. American Airlines, Inc., U.S. District Court Judge O'Connor concluded that American Airlines breached its fiduciary duty of loyalty under ERISA after a four-day bench trial. Unlike typical excessive fee cases related to 401k plans, this case centered on American Airlines' relationship with BlackRock and its ESG proxy voting policies, rather than high investment management fees. The court found that while American Airlines prudently selected and maintained BlackRock as its investment manager, it acted disloyally by letting its corporate interests interfere with its fiduciary responsibility to monitor BlackRock.

Source: Truckerhuss.com, April 2025

401k Investing During Volatile Markets: Updated

As new tariffs disrupt the market, investors may find themselves concerned about their retirement savings. Market fluctuations can lead to anxiety, even among seasoned investors, particularly regarding their 401k accounts. Abrupt declines and unforeseen market shifts can prompt you to reevaluate your investment strategy and consider more conservative options. Nevertheless, it's crucial to adopt a long-term perspective when investing in retirement plans.

Source: Sequoia.com, April 2025

Mid-Year Changes to Safe Harbor Plans

Safe harbor 401k plans can be a great solution for employers that have difficulty passing the annual nondiscrimination testing and wish to avoid making refunds of deferrals and/or matching contributions to Highly Compensated Employees. While there are many benefits to a safe harbor 401k plan design, there are certain restrictions that apply to discretionary plan amendments that plan sponsors should be aware of and are often overlooked when implementing this type of plan. This article focuses on the difference between permitted and prohibited mid-year changes to safe harbor 401k plans.

Source: Newfront.com, April 2025

AT&T Motion Calls Out Forfeiture Suit "Bandwagon"

Claiming that the "plaintiff is jumping on a bandwagon of cookie-cutter plan forfeiture challenges recently brought against dozens of large plans," AT&T has filed a motion to dismiss the suit. The lawsuit argues that this approach breaches ERISA's fiduciary duties, violates the anti-inurement provision, and constitutes prohibited transactions under ERISA. AT&T characterizes the suit as a generic challenge, akin to many others filed recently.

Source: Napa-net.org, April 2025

IRS Considers Guidance on SECURE 2.0 Auto-Enrollment Requirements

The IRS held hearings to gather public comments on two proposed regulations connected to SECURE 2.0, which was published in January. One regulation addresses Roth catch-up contributions, while the other focuses on required automatic 401k features. SECURE 2.0 mandates that plans established after December 29, 2022, implement auto-enrollment and auto-escalation starting this year, defaulting new participants to contribute between 3% and 10% of their pay, with annual increases until contributions reach between 10% and 15%. Additionally, the IRS proposed that plans not subject to auto-enrollment can maintain their "grandfathered" status even if they join a multiple-employer plan created after SECURE 2.0 or one that includes employers with auto-enrollment provisions.

Source: Napa-net.org, April 2025

User's Guide to SECURE 2.0

Navigating SECURE 2.0 is challenging due to its complexity and lack of a table of contents. To help employers and plan sponsors understand its implications, this guide provides a summary of SECURE 2.0 provisions organized thematically, including distinctions between changes for defined contribution and defined benefit plans. The six accompanying tables outline statutory changes, their effective dates, and whether changes are mandatory or optional for employers. The guide also includes observations from Mercer regarding potential implementation challenges and notes drafting errors that Congress plans to correct.

Source: Mercer.com, April 2025

DOL's New Retirement Security Rule Remains on Hold as Agency Pauses Appeals

The DOL has requested the U.S. Court of Appeals for the Fifth Circuit to pause its appeals regarding two federal court cases that challenge its new Retirement Security Rule. This follows two orders from July 2024 that stayed the rule's implementation, originally set for September 2024. The rule aims to broaden fiduciary responsibilities under ERISA to include annuity sales, mandating financial advisors to act in their client's best interests rather than being incentivized by perks from insurance and annuity companies. However, industry groups, such as the American Council of Life Insurers and the Federation of Americans for Consumer Choice, sued to block the rule. After the federal courts' stays, the DOL filed notices of appeal under the Biden administration.

Source: Hallbenefitslaw.com, April 2025

Navigating the Shifting Fiduciary Landscape: Podcast

Todd Solomon was a guest on the 401k Roundtable podcast, hosted by Rick Unser. In the episode, they discussed the evolving fiduciary landscape and trends in ERISA litigation, along with the impact of the Trump administration on the DOL. Todd emphasized the importance of balancing loyalty and prudence in fiduciary duties, considering participant demographics in plan decisions, and the challenges plan sponsors face when assessing cost versus value, especially regarding investments like target-date funds.

Source: Employeebenefitsblog.com, April 2025

What Documents Do I Need for a 401k Audit?

Preparing for a 401k audit can raise questions about required documentation. A sample checklist can help guide you, but note that your auditor will tailor requests based on your specific retirement plan. While the checklist might appear extensive, many items will likely be supplied by your plan's third-party administrator or recordkeeper. To facilitate the audit, it's recommended to provide your auditor with online view-only access to the plan. Here is a sample checklist.

Source: Belfint.com, April 2025

RIA M&A Sees Record-Breaking Activity in Q1 2025

Registered investment advisory firms achieved a record number of acquisitions in the first quarter of 2025, with 75 transactions reported by DeVoe & Company. This surpassed the previous Q1 record of 68 deals set in 2022 and follows a record 272 transactions in 2024. The fourth quarter of 2024 alone had 78 deals, indicating a strong trend in the industry. David DeVoe, CEO of DeVoe & Company, noted that growth is the primary motivation for sellers, as many firms are increasingly opting for acquisitions over organic growth strategies.

Source: 401kspecialistmag.com, April 2025

Controversial Retirement Bill Reaches Congress Again

Rep. Lloyd Smucker reintroduced the Retirement Savings for Americans Act, a bipartisan bill aimed at providing eligible private sector workers access to federally run retirement savings accounts. The RSAA, which offers matching contributions for low-to-middle-income Americans without access to employer-sponsored plans, was initially introduced by Sen. John Hickenlooper in December 2022 and later reintroduced by Hickenlooper and Sen. Thom Tillis in October 2023. While proponents argue that the bill could help those lacking retirement savings, critics express concerns about its potential negative effects on the private 401k market, individual savings, and Social Security's financial stability.

Source: 401kspecialistmag.com, April 2025

2024 MFS DC Plan Sponsor Survey: Building Better Outcomes

The 2024 MFS DC Plan Sponsor Survey reveals insights from 166 U.S. plan sponsors managing over $125 billion in assets and covering over 1.1 million participants. Key topics include plan sponsor confidence, retirement income, investment menus, and plan design. A new feature, the MFS Workplace Retirement Readiness Indicator, measures participant confidence through targeted responses. The report, which also includes views from over 4,000 global plan participants and retirees, highlights trends affecting the defined contribution landscape and identifies discrepancies between employer strategies and employee expectations.

Source: 401kspecialistmag.com, April 2025

Does Outsourcing Impact the Need for Fiduciary Education?

As plan sponsors increasingly rely on advisers and consultants to manage retirement plans and comply with regulations, the need for fiduciary training and education remains vital. It is a misconception that delegating responsibilities to a co-fiduciary, like a 3(21) or 3(38) adviser, absolves the retirement plan committee of its fiduciary duties. Instead, the committee's focus shifts to oversight and controls. Tina Siedlecki from Willis Towers Watson notes that companies are prioritizing their core operations and seeking to enhance their support systems to reduce compliance risks.

Source: Plansponsor.com, April 2025

Senate Bill Seeks to Reverse Retirement Plan Crypto Warning

Senator Tommy Tuberville of Alabama has reintroduced the Financial Freedom Act, which seeks to overturn a 2022 guidance from the DOL that discourages retirement plans from including cryptocurrency and other alternative investments. The legislation would prevent the Labor Secretary from limiting the types of investments available to individual retirement account participants who control their assets. The DOL's guidance highlighted the significant risks associated with crypto investments and warned that they may violate the fiduciary duties of plan administrators, stating that it would investigate any retirement plans that disregard this guidance.

Source: Planadviser.com, April 2025

Time Is Running Out to Utilize Forfeiture Relief (And How to Avoid Lawsuits)

Lawsuits regarding the misuse of forfeitures in retirement plans are ongoing, with outcomes varying. However, individuals and advisors can proactively implement strategies to avoid these lawsuits. Additionally, there is a limited opportunity to benefit from IRS relief related to built-up forfeitures that haven't been utilized in prior years, with a deadline set for the end of 2025. This article outlines ways to take advantage of this IRS forfeiture relief while also providing guidance on preventing potential lawsuits. By helping clients stay compliant and avoid legal issues, advisors can position themselves as valuable resources.

Source: Penchecks.com, April 2025

Talking Points: The Real Retirement Crisis

"The Real Retirement Crisis: Why (Almost) Everything You Know About the US Retirement System Is Wrong" by Andrew Biggs critiques prevalent misconceptions about the U.S. retirement system. Biggs, a senior fellow at the American Enterprise Institute, emphasizes the importance of relying on facts over misleading narratives. The book explores misunderstandings that hinder a clear assessment of the system's effectiveness, supported by tax data, actual retiree sentiment surveys, and various objective studies. It contains 31 pages of footnotes to substantiate its claims, revealing how distorted perceptions can obscure the realities of retirement in the U.S.

Source: Napa-net.org, April 2025

The Next-Gen 401k Report

The Next-Gen 401k Report aims to spark dialogue within the retirement plan industry by providing a detailed market map of the current landscape. It identifies innovators and trends transforming the workplace retirement ecosystem, highlighting 12 key trends and 60 top RetireTech companies. This 22-page report offers actionable insights to help industry professionals stay competitive in a dynamically changing market.

Source: Kwpworks.com, April 2025

How AI Will Impact Your Workplace Retirement Plan

Artificial intelligence is in its early stages but is poised to significantly impact retirement planning and savings. As AI technology continues to evolve, it is being integrated into workplace retirement plans. The MetLife 2025 Enduring Retirement Model Study indicates that plan sponsors recognize AI's potential to enhance employer-provided retirement benefits, potentially helping workers secure their financial futures more effectively.

Source: Kiplinger.com, April 2025

Nontraditional Workers and Retirement Saving: An Overview and Discussion of Policy Issues

This report aims to inform legislative discussions by highlighting the challenges nontraditional workers face regarding retirement savings. It begins by describing various work arrangements in the U.S. and reviewing the primary sources of retirement income for these workers. It provides estimates on their access to and participation in retirement plans before concluding with an overview of recent legislative initiatives aimed at enhancing retirement security for nontraditional workers.

Source: Congress.gov, April 2025

Canada's 2025 DC Plan Summit: President Trump's Pro-Business Agenda Could Boost Mergers, Acquisitions and Public Offerings

Charles Myers, chairman of Signum Global Advisors, stated that Donald Trump is likely to be the "most transformational" U.S. president due to his corporate tax rate strategy and a distinct deregulation plan for the financial and energy sectors. Speaking at Benefits Canada's 2025 Defined Contribution Plan Summit, Myers highlighted Trump's planned corporate tax cuts, which aim to attract foreign investment, boost business mergers and acquisitions, and reopen the initial public offering market. These actions could positively impact both public and private equity markets.

Source: Benefitscanada.com, April 2025

Time Is Running Out to Utilize Forfeiture Relief (And How to Avoid Lawsuits)

During this time of year, employers often question when they can make deductible contributions to a qualified plan. Generally, contributions are deductible for the tax year in which they are made if deposited by the employer's tax return due date, including extensions. Confusion arises when an employer files their return before the deadline, either after applying for an extension or before requesting one. However, filing the tax return does not prevent the employer from later making a contribution and claiming a deduction for that tax year. The explanation for this is explored further in this article.

Source: Asppa-net.org, April 2025

Creating the "Next-Gen 401k Report"

The "Next-Gen 401k Report" by KWP Growth Partners is set to launch on April 8, highlighting twelve key trends that are transforming retirement plans. The report showcases 60 innovative, digitally-focused companies that are leading changes in the workplace retirement plan sector. Will Prest and Lisa Kottler from KWP will discuss the report's insights and its significance for firms in the workplace retirement plan ecosystem in a podcast episode.

Source: 401kspecialistmag.com, April 2025

Fiduciary Basics for New Plan Sponsors

Private-sector retirement plans that do not adhere to the regulations established by the Employee Retirement Income Security Act of 1974 risk facing legal liabilities and financial penalties. If your organization is contemplating the introduction of a retirement plan, it is crucial to understand the fundamentals of fiduciary responsibility. This article provides an overview of these fiduciary essentials.

Source: Plansponsor.com, April 2025*

What to Know About Adding Income to a Plan Lineup

As more Americans approach retirement and seek regular payouts from their savings, plan sponsors are increasingly considering income solutions like annuities for their retirement plans. A TIAA survey of 500 C-suite leaders revealed that 20% believe guaranteed income for life is the best way for employers to enhance workers' retirements, trailing only behind increasing employer matching. However, given changing regulations and fiduciary responsibilities, these income solutions need to be thoroughly vetted before inclusion in retirement plans.

Source: Planadviser.com, April 2025

Cheats Sheets and Hacks for 401k Plan Sponsors

The author reflects on the significant impact of the Internet in their life, noting its ability to provide vast information and time-saving hacks, particularly in fixing things. They share some lesser-known tips and tricks for 401k plan sponsors to simplify their tasks and enhance efficiency.

Source: Jdsupra.com, April 2025

Mergers and Acquisitions Guide to 401k Plans: A Stock Sale

In the event of a merger or acquisition, it's crucial to assess the implications for retirement plans early in the negotiation process. Key steps include discussing the retirement plan's intent with legal counsel and the acquiring entity, as well as reviewing the plan documents to understand the treatment of related employers. Collaborating with a knowledgeable consultant and legal advisors can help identify the best solutions for both the business and its employees, ensuring a smooth transition. The article outlines general considerations and actions relevant to a stock acquisition where one company acquires another, both of which have 401k or other qualified retirement plans.

Source: Sequoia.com, April 2025

Tuberville, Donalds Renew Push for Crypto in 401k Plans

Sen. Tommy Tuberville and Rep. Byron Donalds have reintroduced the Financial Freedom Act, aimed at protecting investment options in self-directed 401k brokerage windows. The proposed legislation would prevent the Labor Secretary from limiting the types of investments available to participants in pension plans that allow individual control over assets. It also ensures that fiduciaries can select investment alternatives without interference from the Department of Labor, as long as participants have access to a diverse range of options and decisions are based solely on risk-return characteristics.

Source: Napa-net.org, April 2025

Are PEPs Reshaping the Retirement Plan Market?

In a Pooled Employer Plan, the Pooled Plan Provider takes on the role of plan sponsor and administrator, assuming most fiduciary responsibilities. PEPs offer a variety of structures and services, with a diverse range of PPPs including large consulting firms, recordkeepers, payroll providers, third-party administrators, and investment advisors. Following policy changes, the adoption of multiple or pooled employer offerings for defined contribution benefits has surged. Fred Reish, a partner at Faegre Drinker, suggests in a recent article for the National Association of Plan Advisors that the growth of PEPs is expected to continue, potentially matching the prevalence of single-employer plans within the next five to ten years.

Source: Georgetown.edu, April 2025

Employer Considerations as New 401k Lawsuit Includes Extensive Claims

A recent lawsuit involving Swiss Re's 401k plan features a wide range of allegations, underscoring the need for 401k plan fiduciaries to adhere to best practices. Regardless of the lawsuit's outcome, these practices are crucial for fiduciaries to defend against potential lawsuits and to minimize the risk of breaching their fiduciary duties. The article outlines several best practices for plan fiduciaries to implement.

Source: Employeebenefitslawblog.com, April 2025

Investments: What Does ERISA Say?

Over ten years into ongoing lawsuits claiming that retirement plan sponsors have breached ERISA fiduciary duties by providing subpar and high-cost investment options, new allegations are still emerging. What does ERISA actually stipulate regarding investment choices? How can plan sponsors shield themselves from potential liabilities? Read this article for valuable insights and guidance.

Source: Colonialsurety.com, April 2025

Adding Emergency Savings Solutions to Retirement Plans

In 2017, a Federal Reserve report revealed that 40% of Americans could not afford an unexpected $400 expense, highlighting a significant financial insecurity issue. The introduction of SECURE 2.0 has now added in-plan emergency savings solutions for plan sponsors, offering new methods to enhance financial security. The focus over the past five years has been on understanding how short-term savings relate to long-term financial stability, and how 401k plans can incorporate these insights to improve participants' financial wellbeing.

Source: Blackrock.com, April 2025

Do We Really Want Roth Retirement Plans to Be More Generous Than Traditional Plans? - Opinion

The author notes that she overlooked a significant detail: the SECURE 2.0 Act has removed required minimum distributions for Roth 401ks. At first, this change may appear to be innocuous; after all, account holders have already paid taxes on their contributions, so why require them to withdraw their funds? However, this reasoning fails to consider that the assets within a Roth account can continue to earn tax-free returns even after the account holder reaches the age of 73 when RMDs typically begin for traditional plans. This capacity to continue growing savings tax-free enhances the overall value of Roth 401ks significantly.

Source: Bc.edu, April 2025

Private Assets in 401ks Should be Expanded, BlackRock CEO Says

In his annual letter to investors, BlackRock CEO Larry Fink advocated for expanding access to retirement plans and increasing investments in private assets. The private asset investing sector is also pushing for greater access to defined contribution plans, with ERISA litigation reform viewed as crucial for facilitating the inclusion of private funds in these plans.

Source: Asppa-net.org, April 2025

Plan Sponsors Focus on Retirement With Lifetime Income

Amid concerns over inflation and market volatility, plan sponsors are dedicated to maintaining workers' financial well-being. According to MetLife's 2025 Enduring Retirement Model Study, 82% of plan sponsors are committed to not cutting retirement benefits, citing reasons such as attracting and retaining talent (69%), demonstrating a long-term commitment to employees (57%), and supporting workers in feeling financially prepared for retirement (52%). Additionally, 90% of employers acknowledge that some workers are delaying retirement due to financial constraints, with 64% attributing the delays to lack of affordability.

Source: 401kspecialistmag.com, April 2025

Retirement Plan Suits Show Value Of Cybersecurity Policies

Recent class action lawsuits regarding data breaches indicate heightened legal risks for retirement plan administrators and sponsors. In a Law 360 Expert Analysis article, Carol Buckmann explains that these entities face potential legal action from participants whose data has been compromised, with claims involving emotional distress, invasion of privacy, and ERISA violations. Buckmann provides practical recommendations for enhancing cybersecurity measures, such as collaborating with experts, adhering to DOL best practices, training employees to identify phishing attempts, implementing multifactor authentication, and requiring regular cybersecurity audits from third-party providers.

Source: Squarespace.com, April 2025

Roth Treatment of Employer Contributions

SECURE 2.0 includes an optional provision allowing Roth treatment for employer contributions in addition to participant deferrals. In a recent survey, nearly half of plan sponsors indicated they are open to adding this provision, a significant increase from the previous year. Currently, about 20% have already adopted it, while over 25% are considering doing so.

Source: Psca.org, April 2025

SECURE 2.0 in 2025: Here Comes a Big Plan Design Change

As we enter 2025, the implementation of new SECURE 2.0 provisions is imminent. Understanding how these provisions will impact plan design, administration, and costs is essential for effectively advising clients. This knowledge allows you to inform clients about upcoming changes, strategize any necessary administrative adjustments, and coordinate communications with participants.

Source: Penchecks.com, April 2025

401k Plan Providers' Road and Role in 2025

One of the author's favorite films is the 1978 classic "The Deer Hunter," directed by Michael Cimino. A notable quote from the film, delivered by Robert De Niro's character, underscores the importance of clarity: "This is this. This ain't somethin' else. This is this." The author reflects on the constantly evolving nature of the 401k plan industry, emphasizing the necessity of staying informed, which is the central theme of the article.

Source: Jdsupra.com, April 2025

Plan Sponsor and RIA Alert: Navigating the 78(3) Fiduciary Liability "Gotcha"

The duty of loyalty for fiduciaries includes a responsibility to disclose all material facts they know or should know. The author suggests that if a plan sponsor, RIA, or other investment fiduciary is not aware of this duty under ERISA (specifically section 78(3)), it raises concerns that proper investigation, evaluation, and disclosure of material facts were neglected. This is particularly problematic in the annuity industry, which is known for its lack of transparency, making it unlikely that annuity issuers provide essential information on costs, spreads, or risks associated with specific annuity products.

Source: Fiduciaryinvestsense.com, April 2025

What Plan Administrators Need to Know About the 2025 RMD Age Increase

Plan administrators are increasingly focusing on the accuracy of participant birthdates due to upcoming changes in Required Minimum Distributions (RMDs) effective April 1, 2025. Participants who turn 73 in 2024 will need to start taking RMDs from their employer-sponsored retirement plans by this date unless still employed and allowed to defer. Failure to meet this deadline can result in steep penalties: 25% of the missed distribution, or 10% if corrected within two years. Consequently, plan administrators are essential in ensuring compliance and helping participants avoid these penalties. This article reviews several steps towards RMD compliance.

Source: Berwyngroup.com, April 2025

Anxiety Drains Interest in Saving for Retirement: Study

A recent survey by the Employee Benefit Research Institute reveals that workers experiencing acute financial stress prioritize retirement savings less than average. The top financial stressors for participants were daily bills (60%), unexpected emergencies (46%), and job security (33%), while only 19% cited "saving enough for retirement." Notably, 64% of respondents had an income below $50,000. In contrast, a similar survey conducted by EBRI in 2024 indicated that saving for retirement (48%) was a primary concern among a broader sample, highlighting the impact of financial stress on retirement planning.

Source: Asppa-net.org, April 2025

The 401k Committee Is Changing and So Should Your Approach

Today's 401k committees often consist of members from four different generations, including a Baby Boomer CFO, a Gen X HR Director, a Millennial Head of People Ops, and a Gen Z Benefits Coordinator. Each generation interprets information differently, which can lead to misunderstandings if the presentation is not customized. Using a generic approach risks alienating participants, while tailoring messages to align with each generation's preferences can foster collaboration rather than a transactional atmosphere. The article suggests strategies for effectively engaging with each generation within the context of a company's 401k committee.

Source: 401k-Marketing.com, April 2025

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