In the case of Cunningham vs. Cornell University, the U.S. Supreme Court clarified the pleading requirements for prohibited transaction claims under ERISA section 406(a)(1)(C). The Court ruled that a plaintiff only needs to allege facts showing that a fiduciary caused an employee benefit plan to receive services from a party in interest, without having to demonstrate the inapplicability of ERISA section 408(b)(2)(A). The author argues that the court's ruling is fundamentally flawed because the definition of "party in interest" encompasses all plan fiduciaries. This interpretation allows for lawsuits concerning all transactions where a plan receives services, including those that ERISA mandates fiduciaries to provide. Consequently, the Court's reading creates a contradiction, as it simultaneously requires fiduciaries to perform certain actions while prohibiting them from engaging in those same actions.
When moving from one retirement plan service provider to another, there are crucial considerations for plan sponsors and new service providers. An increasing number of plans are switching from their existing third-party administrators or bundled providers, according to PenChecks. In a recent webinar, Brian Furgala, Senior Director of Retirement Services Strategy at PenChecks, emphasized the importance of addressing various factors to ensure a smooth transition. This process can help protect both the plan sponsor and the new provider while facilitating effective plan administration for participants.
Schlichter Bogard LLC is seeking what could be the largest attorney fee award following a significant jury verdict in an ERISA class action case, which totaled $38,760,232 for excessive administrative fees. Subsequently, on May 1, 2025, the parties settled the case for $48,500,000, surpassing the jury verdict amount. Schlichter argues that, in accordance with the common fund doctrine, the Court should grant Class Counsel attorney fees amounting to $16,513,179, which represents one-third of the common fund or "Gross Settlement Balance." Additionally, they are requesting reimbursement for reasonable litigation expenses totaling $1,044,209.46, the majority of which pertains to the costs incurred for essential experts that contributed to the jury's verdict.
The author emphasizes the distinction between confidence and arrogance in business. While confidence is essential, arrogance can be detrimental. It can lead to a lack of awareness of risks, create isolation from peers, and erode the foundational elements of trust and relationships. When professionals become arrogant, they tend to stop listening, which hinders their growth and development. The author identifies common mistakes made by overly arrogant providers, highlighting the importance of maintaining humility and openness in the business world.
The One Big Beautiful Bill Act, signed into law on July 4, 2025, establishes "Trump Accounts," a new tax-preferred savings option for children aimed at promoting early investing. The law provides an initial $1,000 government contribution to these accounts for newborns from 2025 to 2028. Individuals, including parents and grandparents, can contribute up to $5,000 annually, and employers may also contribute to support employee recruitment and retention. The article outlines key considerations for employers regarding contributions, account eligibility, plan document requirements, investment options, and nondiscrimination rules, while noting that further guidance from the IRS will be needed on some issues.
The IRS has released final regulations related to a provision in the SECURE 2.0 Act of 2022. These regulations state that participants in 401k or 403b plans, who have FICA wages exceeding a specific dollar amount from the sponsoring employer in the previous year, can only make catch-up contributions as designated Roth contributions. The article discusses key aspects of these final regulations and their implications.
On September 16, 2025, the IRS released final regulations regarding two new catch-up contribution provisions from the SECURE 2.0 Act of 2022. The provisions allow participants aged 60 to 63 to make increased catch-up contributions and require higher-income participants' catch-up contributions to be made as Roth contributions. These final regulations confirm that plan sponsors must implement the Roth catch-up requirement starting with the 2026 taxable year. While the final regulations largely follow the proposed regulations from January, they include clarifications and offer plan sponsors more flexibility in their administration.
According to a recent analysis by Capitalize, the number of lost 401k accounts has surged by 30%, now totaling $2.1 trillion in assets. The 2023 report, conducted in partnership with the Center for Retirement Research, reveals that as of July 2025, there are 31.9 million misplaced accounts. The report highlights a steady increase in forgotten 401k accounts, with 3.5 million left behind in 2023, 4 million in 2024, and an expected 4.2 million in 2025.
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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.
