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.
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.
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.
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.
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.
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.
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.
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.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
