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.
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.
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."
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.
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.
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.
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.
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.
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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.
