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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Another 401k Suit Asserts Breach With Managed Account, Forfeitures

The Siemens Energy, Inc. Savings Plan, valued at $3.5 billion, has been hit with a class action lawsuit for multiple fiduciary breaches, including excessive recordkeeping fees, high managed account charges, a poorly performing stable value option, and the practice of offsetting employer contributions with forfeitures. The defendants in the suit include Siemens Energy, Inc., its Board of Directors, the Administrative Committee, and the Investment Committee, with participant-plaintiff Brian Babinski leading the case.

Source: Napa-net.org, July 2025

DOL Seeks to Expand PEP Participation; Warns of Fiduciary Responsibility

On July 28, the DOL announced a request for public input on how to assist smaller employers in selecting pooled employer plans. It acknowledged that PEPs, introduced by the SECURE Act of 2019, may be unfamiliar to many small employers and that they may lack understanding of ERISA implications. The DOL aims to gather information to address challenges that hinder small employers from adopting PEPs.

Source: Napa-net.org, July 2025

MEP Embezzler Nailed With Big Tax Bill

Matt Hutcheson, who was convicted in 2013 on 17 counts of wire fraud involving over $5 million in retirement plan assets, had his 17-year prison sentence commuted. However, he subsequently faced tax liabilities and penalties related to his embezzlement. A Tax Court ruling determined that the $5,307,688 he siphoned from the retirement plans was considered taxable income from unreported embezzlement, as Hutcheson had abandoned his fiduciary responsibilities and treated the funds as his own.

Source: Napa-net.org, July 2025

Things I Worry About: Every Plan Commits Prohibited Transactions and the Cornell University Decision

In ERISA fiduciary breach lawsuits, plaintiffs typically need to demonstrate that fiduciaries violated legal standards. However, the Supreme Court's ruling in Cunningham v. Cornell University reversed this by placing the burden of proof for exemptions from prohibited transactions on the defendants -- plan fiduciaries. This shift is likely to result in more lawsuits alleging prohibited transactions moving forward to trial, increasing the risk of unfavorable outcomes for fiduciaries.

Source: Fredreish.com, July 2025

401k Breach Response Strategies That Create a Cyber Shield

A strong response to 401k breaches is essential to protect retirement accounts from cyber threats. Fiduciaries must be prepared to respond effectively, as their responsibilities under ERISA become more critical during an attack. Regulators and participants will scrutinize actions taken before, during, and after a breach, making it imperative for fiduciaries to develop a robust and proactive recovery strategy. A response plan should be practical and actionable, rather than just a theoretical document, ensuring the protection of participants, reputation, and fiduciary integrity during crises. Implementing tested strategies helps create a strong defense against cybercriminals targeting 401k plans.

Source: Fiduciarynews.com, July 2025

Oh, Fine! Keep the Money: The New IRS Overpayment Guidance

Given the substantial amounts of money that circulate within a retirement plan and are allocated to various participants, it's not unusual for excessive funds to be deposited into an individual’s plan account. This article examines the existing correction methods for addressing overpayment failures and highlights the new guidance provided in Notice 2024-77 regarding such overpayments.

Source: Ferenczylaw.com, July 2025

The Uncashed Check Conundrum: What Employers Need to Do

Uncashed checks are a common issue faced by retirement plans, typically involving small accounts that are forced out of the plan or required minimum distributions. These checks may be returned if a terminated employee moves without notifying the plan or if a participant requests a distribution but fails to cash the check. Such uncashed checks can create compliance challenges for plan sponsors, often without their awareness.

Source: Brickergraydon.com, July 2025

How Should Target-Date Strategies Hedge Inflation?

Participants invested in target-date strategies may worry about inflation eroding their retirement spending power, as inflation can diminish the purchasing power of savings over time. However, research from BlackRock indicates that a well-balanced approach -- combining future earnings with investments in growth assets -- can sufficiently safeguard future spending against inflation. The research also outlines specific points in the investment glidepath and the appropriate levels of allocation to inflation-hedging asset classes.

Source: Blackrock.com, July 2025

How to Meet Your Fiduciary Duties

A recent fiduciary duty case highlights best practices to prevent a fiduciary breach related to fund selection. How many of these factors does your company or plan adhere to? A court recognized that one company's proactive measures safeguarded it from challenges regarding its fund selection process and identified the factors outlined here as crucial to its decision-making.

Source: Barran.com, July 2025

"Gray Divorce" Trend Threatens Retirement Security: Study

According to the 2025 Annual Retirement Study by the Allianz Center for the Future of Retirement, many married Americans believe that a divorce would significantly disrupt their retirement plans. While the overall divorce rate is declining, "gray divorce" among those aged 65 and older is on the rise. This trend poses specific challenges, particularly for couples who have developed a joint retirement strategy. The study reveals that 56% of married individuals feel a divorce would impact their financial retirement strategy, with 63% of millennials and 52% of Gen Xers expressing this concern, compared to 35% of baby boomers.

Source: Allianzlife.com, July 2025

DCALTA Issues Principles to Guide DC Plan Stakeholders on Use of Private Market Investments

The principles outlined in the paper are designed to assist fiduciaries, financial professionals, and stakeholders in improving DC retirement outcomes through a structured approach to private market investments. Michelle Rappa, Managing Director at Neuberger Berman and Chair of DCALTA, emphasizes that the paper can be a valuable resource for plan fiduciaries seeking to incorporate alternative assets into their investment strategies.

Source: 401kspecialistmag.com, July 2025

The Essential Role of Plan Sponsors in Participant Beneficiary Designations

As a plan sponsor, your responsibilities go beyond managing retirement plans; you also play a crucial role in securing the financial future of participants and their beneficiaries. A key part of this role involves assisting participants with the designation and regular updating of their beneficiaries. This article emphasizes the significance of accurate beneficiary designations, the risks associated with neglecting this aspect, and the proactive measures sponsors can take to educate and support participants.

Source: Psca.org, July 2025*

Experts Split on Private Equity in 401k Plans

President Donald Trump is anticipated to sign an executive order soon to promote private equity and other private market investments in defined contribution plans, according to multiple sources. Retirement experts hold differing views on this initiative; proponents argue that it could provide individual investors access to higher returns due to the inherent "illiquidity premium" of private equity. Conversely, critics highlight the volatility and illiquidity of this asset class, raising concerns about its suitability for 401k plans.

Source: Planadviser.com, July 2025

Plan Forfeiture Complaint Filed Against Aldi Tries New Allegation

In the recent case Castillon v. Aldi Inc., the plaintiffs accuse the grocery chain of breaching its fiduciary duties under ERISA by utilizing participant-forfeited funds to lower company contributions, rather than to cover administrative fees as has been argued in previous complaints. This case, filed in the U.S. District Court for the Northern District of Illinois, introduces the new aspect of timeliness in the forfeiture complaint, following the Department of Labor's supportive amicus brief for plan sponsors.

Source: Planadviser.com, July 2025

It's Time to Restate Your Pre-approved 403b Plan

Every employer sponsoring a 403b plan with a pre-approved plan document must restate that document to reflect legal changes by December 31, 2026. Given the resource and staffing limitations often encountered by nonprofit and public sector organizations, it's essential to begin the restatement process as soon as possible.

Source: Boutwellfay.com, July 2025

401k Coverage for 18-20 Year Olds?

Bipartisan legislation known as the Helping Young Americans Save for Retirement Act (H.R. 4718) has been reintroduced in the House of Representatives to allow employees under the age of 21 to participate in their company's 401k plans. Introduced by Rep. Brittany Pettersen and cosponsored by Rep. Michael Rulli, the bill aims to amend ERISA to enhance access to employer-sponsored retirement plans for individuals aged 18 to 20. The bill has been referred to both the House Education and Workforce Committee and the Ways and Means Committee. A companion bill (S. 1707) was also introduced in the Senate by Sens. Bill Cassidy and Tim Kaine.

Source: Asppa-net.org, July 2025

DOL Supports Employers in Forfeiture Allocation Litigation

In a notable turn of events regarding ERISA forfeiture allocation cases, the DOL has submitted an amicus brief supporting the employer in Hutchins v. Hewlett Packard, a Ninth Circuit case, the first forfeiture case to reach an appellate court. This marks the DOL's first formal stance on the issue, which is usually disfavored by courts, as they prefer legal positions to be established through regulations rather than litigation.

Source: Wagnerlawgroup.com, July 2025

2025 RIA Benchmarking Study

Schwab Advisor Services' 2025 RIA Benchmarking Study, now in its nineteenth year, analyzes data from over 1,300 independent advisor firms managing more than $2.4 trillion in assets under management. The study highlights the strength of the independent advisory model, with firms prioritizing growth, largely driven by organic means. It covers various topics, including asset and revenue growth, client acquisition sources, pricing strategies, staffing, compensation, marketing, technology, and financial performance, emphasizing the importance of trusted client relationships in driving momentum.

Source: Schwab.com, July 2025

DOL's Plan Forfeiture Amicus Brief "Significant," Legal Experts Say

Legal experts view the DOL's recent amicus brief supporting HP Inc. in a 401k-forfeiture complaint as a significant development that could lead to more favorable court rulings for plan sponsors. The DOL stated that the alleged use of forfeited employer contributions in this case would not violate ERISA. Experts note that this marks a shift in the DOL's historical stance towards a more employer-friendly approach, which could influence future legal outcomes.

Source: Plansponsor.com, July 2025

IRS Clarifies Tax Rules for Uncashed Retirement Plan Distribution Checks

The IRS has released updated guidance in Revenue Ruling 2025-15 regarding federal tax withholding and reporting for uncashed retirement plan distribution checks. This ruling specifically addresses situations where an individual receives a distribution check that remains uncashed and is later voided, leading to the issuance of a second check. This guidance aims to standardize the treatment of these scenarios and enhance compliance related to retirement distributions that recipients do not cash immediately.

Source: Planadviser.com, July 2025

Has the Forfeiture Tide Turned? Podcast

Recent federal court dismissals of two significant lawsuits concerning forfeiture reallocation could indicate a shift in judicial perspective. The DOL has also expressed support for plan fiduciaries in a related case, raising the question of whether this might signal a turning point. The lawsuits against JP Morgan and Wells Fargo were dismissed in separate courts for different reasons, but the timing and manner of these dismissals suggest that some federal courts may now view established practices, previously accepted by the IRS, as lacking merit. Nevin Adams and Fred Reish weigh in.

Source: Napa-net.org, July 2025

Choosing the Right Retirement Plan Consultant: Independence, Transparency, and Fiduciary Duty

Choosing the right fiduciary consultant is a legal responsibility for plan sponsors. The guide "Choosing the Right Retirement Plan Consultant: Independence, Transparency & Fiduciary Duty" offers essential insights to help in this decision-making process. It covers how to identify hidden risks in Form ADV disclosures, manage conflicts of interest, and ensure consultant independence. Additionally, it highlights important ERISA and DOL guidelines, and provides a customizable RFP template to facilitate decision-making. The goal is to enable informed, compliant choices that safeguard both the retirement plan and its participants.

Source: Multnomahgroup.com, July 2025

M&A and 401k: Where Fiduciary Oversight Often Goes to Die

In corporate mergers and acquisitions, extensive focus is placed on financial statements, contracts, and other critical aspects, while the company's 401k plan, which affects all employees, is often overlooked. It tends to be treated as a minor detail amid the urgency of deals. However, neglecting proper due diligence on the retirement plan can lead to significant issues when regulators like the IRS or DOL intervene. The author shares experiences of companies eager for growth who ended up facing compliance problems related to their retirement plans as an unexpected consequence of their acquisitions.

Source: Jdsupra.com, July 2025

Court Rules 401k Plan Fiduciaries Must Repay Over $100,000 Within 60 Days

In the case Micone v. iProcess Online, the U.S. District Court for Maryland ruled in favor of the DOL regarding the mishandling of 401k participant contributions by the employer, who also acted as the plan sponsor and ERISA plan administrator. The DOL alleged that the company failed to deposit participant contributions into the 401k plan, commingled those funds with company assets, and did not fulfill matching contributions or process distribution requests promptly. The company did not respond to the lawsuit, and the court highlighted that one of its officers had been convicted of embezzlement. As a result, the court ordered the fiduciaries to pay over $100,000 in outstanding damages to the affected plan participants within 60 days.

Source: Hallbenefitslaw.com, July 2025

IRS Issues Further Guidance on Withholding and Reporting of Uncashed Checks

Revenue Ruling 2025-15, issued by the IRS on July 16, provides guidance for retirement plan administrators regarding withholding and reporting obligations related to uncashed distribution checks. This ruling builds on earlier guidance from Revenue Ruling 2019-19 and addresses issues surrounding uncashed checks that are canceled and later reissued. While the ruling offers helpful insights, the complexities of uncashed check situations mean it may not fully resolve the difficulties faced by plans.

Source: Groom.com, July 2025

IRS Clarifies That Failure to Cash Checks Does Not Affect Withholding or Reporting

Revenue Ruling 2025-15 offers guidance on the withholding and reporting responsibilities related to plan participants or beneficiaries who do not cash their distribution checks and subsequently receive replacement checks. The ruling aligns with general constructive receipt principles, indicating that individuals cannot alter their tax obligations by ignoring or failing to cash compensation. Although the ruling does not explicitly discuss constructive receipt, its implications are consistent with these established principles.

Source: Erisapracticecenter.com, July 2025

Mobile, AI, and Beyond: Trends and the Future of Retirement Plan Participant Experiences

The retirement industry is at a crucial point in its digital evolution, with recordkeepers under significant pressure to deliver seamless, personalized digital experiences that meet the rising expectations of plan sponsors and participants. These expectations are shaped by the user-friendly websites and apps individuals encounter in their everyday lives. Digital experiences are becoming a key factor in Requests for Proposals, dramatically impacting firms' financial performance. While top recordkeepers have made substantial investments to enhance their digital offerings and have seen improvements, many still struggle to keep pace with evolving user experience standards and digital trends. The author shares his insights on where the retirement plan industry's digital experiences are heading and what trends and insights recordkeepers need to know to stay competitive.

Source: Corporateinsight.com, July 2025

Evaluating Private Market Investments in Retirement Plans: Podcast

Jennifer Doss and Matt Patrick from CAPTRUST are joined by Lucian Marinescu and Josh Charlson from Morningstar to discuss the increasing integration of private market investments in defined contribution plans. They delve into potential allocation strategies, operational hurdles, and the practical considerations for plan sponsors, including issues related to fees, liquidity, and valuation transparency. Lucian and Josh also provide valuable insights on the need for fiduciary due diligence, the significance of transparency, and the key factors that sponsors should assess before adding private market strategies to their retirement plan offerings.

Source: Captrust.com, July 2025

How Can Participants Invest Their Retirement Money?

In the past ten years, there has been ongoing debate about allowable investments in 401k plans and the criteria for evaluating them. The current administration's Department of Labor has shifted its stance, becoming more supportive of investments in cryptocurrencies and private equity while expressing skepticism towards ESG (Environmental, Social, and Governance) investment strategies. Here is a quick review.

Source: Beneficiallyyours.com, July 2025

The SEC's Pro-Crypto Shift and Its Implications for 401k Integration

The SEC's 2025 regulatory reforms in crypto are transforming perceptions among institutional and individual investors by clarifying rules on staking, stablecoins, and custody. This shift aims to balance innovation with investor protection. For retirement investors, the inclusion of cryptocurrencies in 401k plans presents potential for reshaping wealth-building strategies, alongside the need to carefully consider associated risks. However, ERISA fiduciaries must navigate risks associated with the high volatility of crypto markets and evolving regulations.

Source: Ainvest.com, July 2025

Deepfaked Fiduciary

The rise of AI-driven deepfake technology poses a new risk for 401k fiduciaries, who are responsible for authorizing fund releases and are personally liable for participant losses under ERISA. Many fiduciaries may not fully understand their potential vulnerability to such advanced attacks. While this risk has not yet materialized in the 401k sector, it's anticipated to arise in the future. The article aims to prepare fiduciaries with insights to help them avoid being among the first to encounter this issue.

Source: Wealthadvisors.com, July 2025

Mutual Fund Expense Ratios Remain at Historic Lows for Retirement Savers

Research from the Investment Company Institute published today shows that retirement savers in 401k plans experienced historically low average mutual fund expense ratios for yet another year. The ICI's latest report, "The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2024," highlights a dynamic and competitive market for mutual funds in 401k plans, offering millions of American workers an affordable option for retirement savings.

Source: Prnewswire.com, July 2025*

House Committee Clears Bill to Curb ERISA Plans' ESG Investing

The House Committee on Education and Workforce has voted along party lines to advance the Protecting Prudent Investment of Retirement Savings Act (HR 2988), which seeks to limit ERISA fiduciaries from considering environmental, social, and governance factors in investment decisions and proxy voting. The legislation includes new notice requirements for defined contribution plans with brokerage windows and prohibits fiduciaries from using diversity criteria when hiring service providers. While the bill may pass in the House, it is expected to struggle in the Senate due to the need for bipartisan support and 60 votes.

Source: Mercer.com, July 2025

The Current State of the Law in ERISA Forfeitures Cases

As the second anniversary of the initial forfeiture lawsuits approaches, there are encouraging developments in district courts handling these cases. However, with numerous motions to dismiss still unresolved nationwide and two pending appeals in the Ninth Circuit, the legal situation is still uncertain. A chronological list of the rulings on these motions to dismiss is provided in the table here.

Source: Mayerbrown.com, July 2025

IRS Issues Guidance on Uncashed Retirement Plan Checks

The IRS has issued Revenue Ruling 2025-15, providing important clarification on the federal tax withholding and reporting obligations of retirement plan administrators when a distribution check is issued but not cashed, and a subsequent check is later issued to the participant. This guidance is especially significant for plan administrators managing situations involving missing participants or unclaimed distribution checks. The article highlights the main aspects of the ruling.

Source: Huschblackwell.com, July 2025

Guide to Dealing With DOL Investigations of Retirement Plans: Updated

The DOL frequently investigates fiduciaries and service providers of plans under ERISA to ensure compliance with Title I of ERISA. Understanding the DOL's enforcement authority and investigative procedures can help alleviate the administrative burden, costs, and stress associated with such investigations. The article provides guidance on what to expect during a DOL investigation and offers practical tips for effectively managing the process.

Source: Groom.com, July 2025

Is Recency Bias Undermining Your Fiduciary Duty?

We've all encountered the financial services tagline, "Past results are no guarantee of future performance." However, wealth management professionals understand that many plan participants often disregard this caution. Steven Abernathy, a leader in wealth management services, delves into the dangers of recency bias and emphasizes the necessity of proactive communication alongside a realistic perspective on market conditions.

Source: Corporatecomplianceinsights.com, July 2025

IRS Issues Guidance on Treatment of Uncashed Retirement Plan Distribution Checks

On July 16, the IRS released guidance regarding withholding and reporting related to uncashed retirement plan distribution checks, as detailed in Revenue Ruling 2025-15.

Source: Asppa-net.org, July 2025

Fiduciary Breach Suit Results From Beneficiary Disclosures

A lawsuit questioning whether providing information about designated beneficiaries on a participant statement could result in a fiduciary breach has been dismissed by the U.S. Court of Appeals for the Fifth Circuit. The case, LeBoeuf v. Entergy Corp., involved claims that the quarterly plan statements sent to participant Alvin Martinez contained "materially misleading information" about his beneficiary designations following his remarriage. Ultimately, the court ruled in favor of the defendants, dismissing the allegations.

Source: Asppa-net.org, July 2025

More Historic Lows for 401k Mutual Fund Expense Ratios

In 2024, 401k plan participants benefited from historically low average mutual fund expense ratios, according to a report by the Investment Company Institute released on July 16. The average expense ratio for equity mutual funds dropped by 66%, from 0.76% in 2000 to 0.26% in 2024. Additionally, the average expense ratios for hybrid mutual funds decreased by 44%, and for bond mutual funds, they fell by 69% over the same period.

Source: 401kspecialistmag.com, July 2025

Private Equity's Fast Lane to 401ks

By 2025, the gap between private market investments and the $8.7 trillion U.S. 401k market is closing rapidly, particularly following Donald Trump's presidential election victory in 2024. This has accelerated the push for private equity inclusion in 401k plans, with major companies like Blackstone, KKR, and Apollo eager to enter this lucrative market. Several significant announcements have been made recently, highlighting the urgent movement towards integrating private equity into retirement funds, which could generate hundreds of billions in inflows amid traditional funding limitations.

Source: 401kspecialistmag.com, July 2025

Attorneys' Fees Request Comes in at $23 Million in UnitedHealth's Historic $69 Million Settlement of 401k Suit

UnitedHealth Group has reached a $69 million settlement regarding poorly performing target date funds in its 401k plan. The attorneys representing the class in the lawsuit have requested $23 million in fees, which includes one-third of the settlement, $735,163 for litigation costs, and a $50,000 service award for class plaintiff Kim Snyder, who dedicated 340 hours to the case over four years. This settlement is noted as the largest ERISA settlement for breach of fiduciary duty related to a failure to remove a poorly performing investment option from the plan.

Source: Hallbenefitslaw.com, July 2025

Ninth Circuit Dismisses Intel's 401k Lawsuit Concerning Inclusion of Private Equity Investments

The Ninth Circuit has dismissed a 401k lawsuit filed by Intel employees, who claimed that the inclusion of private equity and hedge funds in the company's defined contribution plans breached fiduciary duties under ERISA. The court ruled that ERISA does not prohibit certain investment types in participant-directed plans. It indicated that, despite their higher fees and complexity, private fund investments can be considered prudent options based on the circumstances.

Source: Hallbenefitslaw.com, July 2025

UnitedHealth Faces Another Lawsuit Concerning Misused Forfeited 401k Funds

Employees have filed two lawsuits against UnitedHealth Group, alleging the company misused forfeited 401k funds to reduce its employer contributions, violating ERISA. The first lawsuit, Kotalik et al. v. UnitedHealth Group Inc. et al., claims UHG used these funds for employer contributions instead of administrative expenses. The second lawsuit, Holly Hendrickson v. UnitedHealth Group, alleges similar improper retention of forfeited funds. This follows a previous class action lawsuit, Snyder v. UnitedHealth Group, which UHG settled for $69 million after litigation revealed the company prioritized low-performing target-date funds to maintain relationships with Wells Fargo.

Source: Hallbenefitslaw.com, July 2025

Navigating Cryptocurrency in Your 401k: Opportunities and Risks

The Trump administration has reversed Biden-era guidance that cautioned against including cryptocurrency in 401k investment options. This allows retirement investors to access digital assets like Bitcoin and Ethereum through their 401ks. The previous advice urged plan fiduciaries to be very cautious about adding crypto options. The rollback may encourage more plan sponsors to offer these investments, but since sponsors still have fiduciary obligations, widespread adoption of cryptocurrency in 401k plans may not happen immediately.

Source: Investopedia.com, July 2025

401k Cybersecurity Compliance Creates These New ERISA Duties

The article emphasizes the importance of 401k cybersecurity compliance in light of modern threats such as phishing, ransomware, and deepfakes. Given that cybersecurity poses significant risks to retirement plans, fiduciaries can no longer regard it solely as an IT issue; it is now considered an integral part of prudent plan management and an implied fiduciary duty under ERISA. The article outlines practical measures that fiduciaries can take to ensure cybersecurity compliance and protect participants' savings from potential breaches.

Source: Fiduciarynews.com, July 2025

Follow the ERISA Roadmap: Good Governance Leads to Good Decisions

Good plan governance is essential for effectively meeting ERISA fiduciary responsibilities, as it outlines responsibilities, deadlines, and accountable parties. The article discusses nine key areas that encompass effective plan governance.

Source: Cohenbuckmann.com, July 2025

401k Forfeiture Litigation: Implications for Plan Sponsors

Since 2023, there has been a surge of class-action lawsuits alleging violations of fiduciary duties under ERISA concerning the management of 401k forfeitures. Plaintiffs claim that those responsible for deciding the use of forfeited funds have a fiduciary duty to the plan participants who remain in the plan. They argue that ERISA mandates these decisions prioritize the interests of participants, particularly in reducing administrative costs. Some plaintiffs have had limited success in overcoming motions to dismiss their cases, highlighting the legal vulnerabilities in the handling of 401k forfeitures. Fortunately, if you sponsor a plan that allows discretion in how to use forfeitures, there are several options to reduce litigation risk concerning their use.

Source: Bsk.com, July 2025

Unpacking the One Big Beautiful Bill's Employee Benefit Provisions

On July 4, 2025, President Trump enacted the One Big Beautiful Bill Act, a comprehensive tax and spending package that introduces significant changes to employee benefit plans. Key provisions include adjustments to health savings account eligibility, updates to telehealth services, modifications to dependent care assistance limits, and other fringe benefits. The changes to telehealth services will take effect in 2025, while the remaining changes will start in 2026. Here's a recap.

Source: Benefitsnotes.com, July 2025

What Fiduciaries Need to Demonstrate When Investing in "Shiny New Objects"

New investment options, "Shiny New Objects" (SNO), are on the rise along with marketing campaigns promoting their potential for high returns and low risk. With the removal of certain regulatory restrictions on private equity, bitcoins, and alternative investments, fiduciaries may feel encouraged to explore these options. While investing personal funds in these SNOs may be acceptable, it becomes problematic when managing an investment portfolio that must adhere to a fiduciary standard of care.

Source: 401kspecialistmag.com, July 2025

Forfeiture Case Brought Against WakeMed Hospital System

A new lawsuit has been filed by participant-plaintiff Jeanette Tillery on behalf of the 12,000 members of the WakeMed Retirement Savings Plan. The suit challenges how the plan handles forfeitures. Participant argues that the defendants have only used forfeitures to offset the employer's future matching and nonelective contributions throughout the relevant period, rather than following the plan's specified provisions.

Source: Psca.org, July 2025

Retirement Security Improved by Allocating a Portion of DC Plan Assets Into Annuities

A recent paper from the National Bureau of Economic Research proposes a solution to address longevity risk among retirees by defaulting 20% of a retiree's assets above a certain threshold into an immediate annuity. This approach aims to alleviate concerns that financially inexperienced retirees may overlook guaranteed lifetime income options. The research, conducted by professors Vanya Horneff, Raimond Maurer, and Olivia Mitchell, suggests that such automatic allocation could enhance retirement security for many participants, particularly benefiting college graduates if the annuity is deferred until age 80.

Source: Planadviser.com, July 2025*

The Truth About Auto-Portability: Better Alternatives

The text discusses the challenges and considerations associated with auto-portability in retirement plans, particularly regarding early lump sum distributions and their impact on individuals' financial futures. It suggests there may be better alternatives than auto-portability to achieve the desired benefits. One alternative requires engagement from those involved in the initial stages of auto-portability, while the other calls for a collaborative effort within the community. This article reviews the alternatives.

Source: Penchecks.com, July 2025

Court in Natixis Litigation Provides a Practical Discussion of What Constitutes a Prudent Fiduciary Committee Process

On June 26, 2025, the U.S. District Court for the District of Massachusetts ruled in favor of Natixis Investment Managers and its fiduciary committee in the case Waldner v. Natixis Investment Managers, L.P., et al. The plaintiffs claimed that the defendants violated their ERISA duties by including underperforming proprietary funds in the 401k plan. However, after a full trial, the court sided with the defendants on all counts, emphasizing the importance of a "prudent process" in managing the fund menu. The ruling focused on the prudence issues raised by the plaintiffs' allegations.

Source: Octoberthree.com, July 2025

Guidance Needed on Catch-up Contributions Under Roth Mandate: AICPA

The AICPA has sought further guidance from the Treasury and the IRS concerning catch-up contributions designated as Roth contributions, as outlined in Section 603 of the SECURE 2.0 Act of 2022. In a letter dated July 1, the AICPA addressed proposed regulations issued in January that include updates related to these statutory changes, referred to as the Roth mandate. This mandate requires that catch-up contributions from eligible employees, who meet a certain income threshold, be designated as Roth contributions within employer-sponsored retirement plans.

Source: Journalofaccountancy.com, July 2025

Retirement Plan: Professional Fiduciary?

When sponsoring a retirement plan, engaging outside experts like seasoned fiduciaries is often a wise decision. However, it is crucial to clearly define each party's responsibilities and liabilities. While plan sponsors can never eliminate the risks associated with their role as ERISA fiduciaries, they can mitigate these risks through strategic outsourcing. Read this article for a deeper understanding.

Source: Colonialsurety.com, July 2025

Best Practices for ERISA Plan Sponsors and Fiduciaries in a Changing World: Handling Vendor Contracts

As changes and risks increase for plan sponsors and fiduciaries, they can no longer ignore the specifics of vendor contracts. It is crucial for them to ensure that their expectations align with the contract terms. Additionally, they should have legal counsel review these contracts before signing to identify any limitations on vendor liability or performance obligations. As the landscape evolves and fiduciaries face greater financial exposure, the consequences of not addressing these issues proactively could become significantly detrimental.

Source: Bostonerisalaw.com, July 2025

Part of Rollover Rule Vacated by Federal Court

A federal judge has formally set aside part of the Department of Labor's investment advice regulation, specifically regarding the interpretation of a rollover recommendation as the beginning of a series of transactions that could be deemed a "regular basis." This ruling marks the second time a federal court has reinstated the traditional understanding of what constitutes "regular basis." While fiduciary responsibilities still apply to advice given to plan participants regarding rollovers, a rollover recommendation made by an advisor without an existing relationship will remain a distinct issue.

Source: Asppa-net.org, July 2025

Plan Sponsors Shift Priorities to Cybersecurity, AI

A recent Escalent report highlights that fewer defined contribution plan sponsors are prioritizing cost reduction. Only 40% of plan sponsors identified decreasing costs as a key focus for the upcoming year, down from 50% in 2024. Instead, attention is shifting towards cybersecurity and artificial intelligence due to increasing concerns about data breaches and cyberattacks. The report reveals that 70% of plan sponsors and 10% of large-mega plans experienced a 401k-related data breach in the past year. Cybersecurity threats were reported as the primary concern for 52% of surveyed sponsors, surpassing worries about underperforming investment options (45%) and inadequate employee retirement savings (43%).

Source: 401kspecialistmag.com, July 2025

DOL Issues Brief Defending Employer Forfeiture Practices

The DOL, along with industry trade associations and business groups, filed an amicus brief supporting plan sponsors in the Hutchins v. HP, Inc. lawsuit. The brief encourages the Ninth Circuit Court of Appeals to uphold a lower court's decision regarding HP's use of forfeited funds. Paul Hutchins, a participant in HP's 401k plan, claimed that from 2019 to 2023, HP improperly used these forfeited funds -- linked to unvested employer contributions -- to fulfill its own matching contributions instead of covering plan administrative fees. Hutchins argued that this practice violated HP's fiduciary duties under ERISA.

Source: 401kspecialistmag.com, July 2025

Implications and Action Items for ERISA Attorneys Following Cunningham v. Cornell University

The U.S. Supreme Court's decision in Cunningham v. Cornell University significantly lowers the pleading standard for prohibited transaction claims under ERISA. This ruling allows plaintiffs to advance their claims by merely alleging common practices among employee pension plan sponsors, such as using plan assets to pay recordkeepers. The Court identified tools to help combat meritless litigation, but these tools will need further refinement by district courts. As a result, ERISA plan fiduciary counsel should familiarize themselves with these tools, especially in relation to the Federal Rules of Civil Procedure.

Source: Verrill-law.com, July 2025

Breaking Down the One Big Beautiful Bill's Impact on Employee Benefits

On July 4, 2025, Donald Trump signed the One Big Beautiful Bill into law, which includes significant employee benefits provisions alongside major tax reforms. Key highlights of the OBBB include: expanded access to health savings accounts and eligible expenses; confirmation of first-dollar coverage for telehealth services under high-deductible health plans; and a permanent increase in the annual contribution limit for dependent care flexible spending accounts for the first time since 1986. These benefits-related changes will take effect on January 1, 2026. The update provides an overview of these provisions and outlines actions employers should consider for their employee benefit plans in anticipation of these changes.

Source: Seyfarth.com, July 2025

How Small Businesses Can Help Employees Prepare for Retirement

Many people aspire to a comfortable retirement, and while employers often provide retirement savings plans, small business owners face challenges in establishing these plans due to time constraints, administrative work, costs, and compliance issues. To simplify the process of setting up retirement plans for employees, small business owners should consider three specific strategies that can facilitate employee savings for retirement.

Source: Prnewswire.com, July 2025

Designated Beneficiary Dispute Lawsuit Dismissed

A recent lawsuit regarding fiduciary breaches related to beneficiary information on participant statements has been dismissed by the U.S. Court of Appeals for the Fifth Circuit. The case, LeBoeuf v. Entergy Corp., involved claims that quarterly plan statements sent to participant Alvin Martinez contained "materially misleading information" about his beneficiary designations after his remarriage. The dismissal provides a resolution to this issue, indicating that providing such information did not result in a fiduciary breach.

Source: Psca.org, July 2025

DOL Considering PEP Rulemaking

The DOL has submitted a Request for Information regarding pooled employer plans to the White House's Office of Management and Budget. This submission, made on July 1, is at the pre-rule stage and aims to gather input on implementing ERISA amendments from the SECURE Act. The DOL plans to consult with various stakeholders, including employers, employees, and retirement plan service providers, to identify areas where guidance could aid in establishing and operating PEPs.

Source: Psca.org, July 2025

Retirement Industry Mostly Applauds "Big Beautiful Bill"

The retirement industry has largely welcomed the passage of the "Big Beautiful Bill," but the legislation gives the sector little to shout about.. The legislation expands health savings accounts and fulfills part of President Trump’s campaign promise by providing a temporary deduction of up to $6,000 for individuals aged 65 and older who earn under $75,000 yearly (or under $150,000 for married couples). However, changes to the defined contribution retirement plan sector remain minimal.

Source: Plansponsor.com, July 2025

What Can the DC Universe Learn From Annuities in 403b Plans? It's Complicated

The defined contribution community commonly recognizes the complexity of annuities, with over half of plan sponsors in a January 2024 Greenwald Research survey stating that they find annuities too complicated. This complexity encompasses not only the functionality and costs of the products but also determining the most suitable options and understanding participant demand. As DC plan sponsors weigh their options -- ramping up promotion of existing annuities or developing new ones in response to shifting demand and loosened rules -- they would do well to examine how annuities have long been used in 403b plans. But the lessons there, too, are nuanced.

Source: Plansponsor.com, July 2025

Meeting the Challenges of Adding In-Plan Retirement Income Solutions

Retirement income solutions are becoming more popular, but challenges remain in their adoption and implementation within plans. During a Broadridge webinar on June 26, industry experts Jania Stout, Nicole Corning, and Michael Kleeman discussed obstacles to integrating guaranteed income options and strategies for facilitating participants' transition from saving to spending. The webinar aimed to provide insights for advisors on how to engage with plan sponsors regarding these developments in retirement income solutions.

Source: Napa-net.org, July 2025

Stifel Slapped With 401k Fiduciary Breach Suit

A new lawsuit claims that plan fiduciaries acted unreasonably, resulting in significant financial losses for the Plan and its participants. The lawsuit indicates that as a "jumbo" plan, with over $1.3 billion in assets, the fiduciaries had the ability to negotiate for quality, low-cost services but failed to do so. Additionally, it accuses them of not taking timely action to reduce Plan expenses and allowing excessive charges for services from 2019 to 2023.

Source: Napa-net.org, July 2025

Top 10 Benefits-Related Impacts of the One Big Beautiful Bill Act

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, which includes various tax incentives for paid family leave, employer-provided child care, telehealth services, and education benefits. The act makes several tax credits from the Tax Cuts and Jobs Act of 2017 permanent, which may encourage more employers to offer related benefits. The article highlights key aspects of the budget reconciliation package relevant to employers and benefit plan sponsors.

Source: Ifebp.org, July 2025

Things I Worry About: Private Funds and 401k Plans

The private fund industry is seeking to gain access for its funds to be included in 401k plans. While a discussion on the benefits of private fund investments is more suited for investment professionals rather than legal experts, there are significant legal considerations under ERISA that affect the inclusion of these investments in participant-directed plans. This article explores some of those legal challenges.

Source: Fredreish.com, July 2025

Seven Common 401k Cybersecurity Threats Fiduciaries Must Understand

Fiduciaries often consider risks like market volatility and regulatory changes, but they must also focus on the growing threat of cybercrime, which targets 401k plans. Cybercriminals see these plans as prime targets due to the sensitive data and significant financial assets they hold. Understanding cybersecurity threats is essential for fiduciaries to adhere to their governance responsibilities under ERISA. The article outlines seven common cybersecurity threats that fiduciaries need to recognize to safeguard participants' retirement savings.

Source: Fiduciarynews.com, July 2025

Why Increasing Access, Participation in Workplace Retirement Plans Needs to be Prioritized: Pew

Nearly half of private sector workers lack retirement benefits through their jobs, creating significant financial challenges for them. According to a brief from The Pew Charitable Trusts, this absence of employer-sponsored retirement plans can lead to increased reliance on government social services, which poses a financial burden on taxpayers. Expanding access to and participation in workplace retirement savings options is therefore crucial, as it would help families prepare for retirement and alleviate future costs associated with social services for state and local governments.

Source: 401kspecialistmag.com, July 2025

Why 401k Plan Sponsors Can't Afford to Be Cheap, Controlling, and Clueless

After nearly 30 years in the industry, the author has witnessed numerous challenges faced by plan sponsors, including legal issues, missed opportunities, and poor fund selections. A common problem is that many plan sponsors are inattentive, despite wanting the best for their employees. Their tendencies to cut costs, exert excessive control, and become complacent create significant risks, leading to fiduciary liability and potential failure. The author views this negligence as a slow-motion disaster waiting to unfold.

Source: Jdsupra.com, July 2025*

One Big Beautiful Bill: The Benefits Provisions

The key benefits-related provisions of OBBB are summarized in this chart. Key benefits of the OBBB include several provisions related to employee benefits. Notably, both the initial House-passed version and the final version maintain the existing tax incentives for retirement savings and do not cap employer-sponsored health insurance exclusions. However, the final version introduces changes to Health Savings Accounts, fringe benefits, and executive compensation. It also establishes new tax-preferred "Trump Accounts" for children and allocates $100 million to the Office of Management and Budget for deregulatory efforts.

Source: Groom.com, July 2025

Supreme Court Seeks Input From Solicitor General in 401k Fees Case

The U.S. Supreme Court is soliciting the U.S. Solicitor General's opinion on a case involving Parker-Hannifin Corp.'s 401k plan, which has been accused of retaining underperforming target-date funds that charged high fees. The lawsuit, filed in 2021 by five current and former participants on behalf of approximately 32,000 members, claims that Parker-Hannifin violated its fiduciary duties under ERISA by mismanaging the retirement plan. A federal judge initially dismissed the case in December 2023, but the 6th U.S. Circuit Court of Appeals later reversed this decision.

Source: Planadviser.com, July 2025

Schlichter, Pentegra Settle MEP Fiduciary Breach Suit for $48.5 Million

In early May, a settlement was announced regarding a lawsuit that began in September 2020. A jury had previously awarded the plaintiffs nearly $39 million, although they had sought damages between $33 million and $115 million. Additionally, the plaintiffs had a second claim alleging the defendants engaged in prohibited transactions related to the retention of PSI, with potential damages of up to $157 million, along with requests for equitable relief for the plan's future management. The terms of the settlement have now been disclosed, though they fall short of the original amounts sought.

Source: Napa-net.org, July 2025

Broader Investment Options on the Horizon for Section 403b Retirement Plans

The House Financial Services Committee has approved legislation (H.R. 1013, the Retirement Fairness for Charities and Educational Institutions Act of 2025) that aims to expand investment options for participants in retirement plans maintained by universities and hospitals. Currently, 403b plan participants have fewer investment choices compared to those in Section 401k plans. The proposed act would allow certain 403b plans to include collective investment trusts as an investment option, helping to address this disparity and improve the investment opportunities for 403b participants.

Source: Mayerbrown.com, July 2025

DOL Reopens Discussion of Private Pension Investments Expectations

The management of retirement funds is influenced by changing political dynamics, particularly concerning ERISA, which mandates fiduciaries to prioritize participants' interests. Recent discussions have revolved around new investment approaches like environmental, social, and governance criteria and emerging products such as cryptocurrency. In May 2025, the DOL initiated actions that reversed the previous Biden administration's policies on ESG and cryptocurrency. These shifts are significant for fiduciaries of ERISA plans, including private sector and union pension plans, as they must navigate compliance in an evolving financial landscape.

Source: Lw.com, July 2025

DOL Reverses Course on ESG and Cryptocurrency Investment Policies

The DOL is shifting its approach to environmental, social, and governance investing and cryptocurrency with qualified retirement plans governed by ERISA. In a letter to the U.S. Court of Appeals for the Fifth Circuit regarding the Utah v. Walsh case, the DOL indicated it will issue a new rule that aligns with the Trump Administration's view, which deems the use of individual ESG factors as inconsistent with ERISA fiduciary duties. This move will replace a 2023 rule from the Biden Administration. Additionally, the DOL has rescinded Biden-era regulations that discouraged cryptocurrency investments in defined contribution plans, removing previous warnings and easing the way for plan sponsors to incorporate digital asset options.

Source: Hklaw.com, July 2025

Timely Use Forfeitures

The IRS has made its stance clear: if you have plan forfeitures from 2024 or earlier, you must use them by December 31, 2025, or you could face compliance issues. Acknowledging that many plan sponsors may be unaware of this requirement -- whether due to lack of knowledge or oversight -- the IRS is providing a one-time grace period.

Source: Jdsupra.com, July 2025

Cybersecurity for Employee Benefit Plans: How to Align With DOL Best Practices

Employee benefit plans are increasingly vulnerable to cyber threats due to the sensitive data they manage, including Social Security numbers, medical histories, and financial information. This data, often stored with various third-party vendors, is attractive to cybercriminals. In response, the DOL calls on plan fiduciaries to adopt proactive cybersecurity measures and to regularly assess the effectiveness of these programs through independent third parties. The article outlines the DOL’s best practices and provides practical steps organizations can take to align with these guidelines.

Source: Withum.com, July 2025

The Long-Term Power of Starting Early in a 401k

The power of compounding is a vital advantage for 401k participants when saving for retirement. Compounding refers to the growth generated not just from the principal investment but also from the returns on that investment. To maximize the benefits of compounding, it’s essential to start saving early. By beginning in your twenties, you allow your investments more time to grow, making even smaller early contributions potentially more effective than larger later contributions due to the cumulative effects of compounding.

Source: Savantwealth.com, July 2025

Proprietary Fund Case Against Natixis Dismissed

A federal judge has dismissed a lawsuit that claimed the Natixis defendants allowed underperforming funds to remain in a retirement plan out of self-interest and failed to prudently monitor or remove them. The suit argued that the defendants used an imprudent fund selection process by only adding proprietary funds since 2014. While the judge acknowledged the complexity of the case, they ultimately ruled against the arguments regarding imprudence in fund selection and monitoring.

Source: Psca.org, July 2025

A Review of Our Annual Retirement Plan Fee Benchmarking: Webinar

Each year, the Multnomah Group collects fee data from various recordkeeping providers used by their clients' plans. They analyze this information and create a report that details the fees paid for recordkeeping and benchmark them against peer group ranges. This fee benchmarking webinar addresses the significance of fee benchmarking, highlights key findings from the 2023 data, explains peer group ranges, advises on steps to take if plan expenses exceed these ranges, discusses the advantages of conducting a vendor search, and identifies other ways recordkeepers might profit from your plan.

Source: Multnomahgroup.com, July 2025

The Problem of Organizational Drift for 401k Plan Providers: Commentary

The author expresses a keen interest in business history, especially the reasons behind the failures of certain companies and organizations. He foresaw the downfall of Sears and Blockbuster Video long before it happened. Failures in organizations don't occur overnight; as Red noted in The Shawshank Redemption, it simply requires "pressure and time." At the forefront of these issues is organizational drift, also known as strategic drift. This phenomenon occurs when an organization gradually strays from its original trajectory, often without being aware of the shift. For 401k plan providers, there's an opportunity to learn from the missteps of these unsuccessful providers to avoid making the same mistakes.

Source: Jdsupra.com, July 2025

Arbitration Provision at Issue in Ninth Circuit Appeal of ERISA 401k Suit

The Capital Group Companies Inc. is appealing to the U.S. Ninth Circuit Court to enforce an arbitration provision in its 401k plan, arguing that a lower court was wrong to deny its motion to compel arbitration in a former employee's ERISA lawsuit. The district court rejected the arbitration provision because it allegedly waived statutory rights under ERISA to seek class or collective relief for all plan participants. Capital Group contends that the district court misapplied the effective vindication exemption of the Federal Arbitration Act.

Source: Hallbenefitslaw.com, July 2025

Getting Ahead of the New Roth Catch-up Requirement: Issues to Consider Now

Plan sponsors and recordkeepers were relieved by the postponement of the Roth catch-up contribution requirement under SECURE 2.0 until 2026, as compliance would have added significant complexity to the administration of 401k and 403b plans. This complexity necessitates prior planning and decision-making. Consequently, plan sponsors are encouraged to start addressing key issues related to this upcoming requirement. This article reviews some of those key issues.

Source: Cohenbuckmann.com, July 2025

How Employers and Policymakers Can Help Improve Retirement Security

Defined contribution plans support retirement savings, but they frequently struggle to provide a reliable income in retirement. Annuities can convert savings into lifelong income, but their adoption is low. Guaranteed income solutions are another option that can ensure retirees receive a consistent paycheck for life. A collaborative approach involving both private innovations and public policy is necessary to strengthen retirement outcomes, enabling more Americans to retire with dignity.

Source: Blackrock.com, July 2025

EBSA Nixes Obsolete Interpretive Bulletins Relevant to Retirement Plan Admin

On June 30, the Department of Labor's Employee Benefits Security Administration announced the removal of certain interpretive bulletins related to the administration of retirement plans, deeming them obsolete and potentially confusing. This action, formalized in a Direct Final Rule, targets specific bulletins under ERISA that the DOL no longer considers necessary due to subsequent guidance and the implications of the 1978 Reorganization Plan No. 4. The DOL's objective is to reduce confusion and complexity in the regulatory framework.

Source: Asppa-net.org, July 2025

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