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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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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