Summaries

Court and Legal

Second Spouse Receives $3 Million in 401k Dispute, Surviving Adult Children Receive $0

On May 1, 2025, the U.S. Court of Appeals for the Fifth Circuit upheld the dismissal of a breach of fiduciary duty claim against Entergy Corporation's Employee Benefits Committee. The court found that the Committee correctly disclosed the policy that marriage voids prior beneficiary designations unless a spousal waiver is provided. Since the plan sponsor did not obtain a spousal waiver from the participant's second spouse before the participant's death, the Committee was justified in disbursing approximately $3 million from the participant's 401k account to the second spouse instead of his adult children, as indicated on the participant's last beneficiary form.

Source: Masudafunai.com

Federal Court Denies Monster Beverage's Motion to Dismiss 401k Fee Suit

A federal district court judge in California has denied Monster Beverage Corp.'s motion to dismiss a class action lawsuit filed by employees. The employees allege that Monster failed to fulfill its fiduciary duties by not adequately monitoring Transamerica Retirement Solutions, the third-party administrator of its 401k plan. They claim Transamerica charged excessive recordkeeping fees based on plan revenue rather than actual services. Additionally, the employees argue that Monster unnecessarily maintained a large balance in its ERISA benefit account, resulting in wasted funds from the plan.

Source: Hallbenefitslaw.com

Prudential Defends Lower Court Win in 401k Suit on Appeal

Prudential Insurance Co. of America has filed an appellate brief with the U.S. Court of Appeals for the Third Circuit, supporting a lower court's summary judgment in a class action lawsuit. The lawsuit, Young Cho v. Prudential Insurance Co. of America, involves allegations from plaintiff workers that Prudential violated its fiduciary duties under ERISA by making imprudent investment decisions, leading to significant losses in retirement plan investments. Prudential argues that the workers' claims are speculative and commended the lower court for its thorough application of the summary judgment standard based on the evidence of Prudential's prudent fiduciary practices.

Source: Hallbenefitslaw.com

Bed Bath & Beyond Reaches $1.95M ERISA Settlement in Proposed Class Action

Bed Bath & Beyond's 401k committee has received preliminary court approval for a $1.95 million settlement regarding a class action lawsuit filed under ERISA. The lawsuit was brought by plan participants who accused the company of mismanaging its retirement plan, which affected around 2,100 employees before the plan was terminated due to bankruptcy. The proposed settlement was reached in December, and details were disclosed in February. A fairness hearing for the settlement is set to take place in October.

Source: Hallbenefitslaw.com

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Fiduciary and Plan Governance

What the Supreme Court's ERISA Decision Means for Retirement Plans: Podcast

In this episode of the Revamping Retirement podcast, hosts Jennifer Doss and Peter Ruffel welcome Stephanie Gutwein, a partner at Faegre Drinker, to explore the ramifications of the Cunningham v. Cornell Supreme Court decision on ERISA's prohibited transaction regulations. The discussion covers the intricacies of ERISA's prohibited transaction rules and exemptions, along with the recent Supreme Court ruling that impacts litigation involving plan sponsors. Stephanie offers valuable advice for plan fiduciaries, highlighting the importance of establishing strong processes and thorough documentation to effectively manage this changing environment.

Source: Captrust.com

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Insight: Studies, Research, Analysis, or Papers

2025 Retirement Confidence Survey: A Closer Look at Black Americans

The 2025 Retirement Confidence Survey aims to assess the attitudes of American workers and retirees toward retirement issues, with a specific focus on Black Americans through an oversample for deeper analysis. The analysis reveals that Black Americans tend to have lower incomes and fewer assets compared to non-Black Americans, indicating significant disparities that impact retirement confidence and other survey metrics. The article emphasizes the importance of examining the responses of Black Americans while controlling for income to better understand these challenges. It also reviews key findings of the study.

Source: Ebri.org

Workers Without Access to Retirement Benefits Struggle to Build Wealth

Retirement savings plans are essential for wealth-building in the U.S., with most of the $20.8 trillion in retirement savings coming from employer-sponsored programs like 401ks. However, nearly 56 million private sector workers lack access to these benefits, hindering their ability to plan for retirement. Expanding access and participation in workplace retirement savings could help families secure their financial futures and reduce future social service costs for state and local governments.

Source: Pew.org

Has Pension Participation in the Private Sector Improved?

This brief explores the participation of private sector workers in employer-sponsored retirement plans, addressing whether this participation has improved over time. It first examines the strengths and limitations of annual data from the U.S. Bureau of Labor Statistics, focusing on both employer-based and household-based surveys. The second section discusses pension activity based on additional household surveys, including the Survey of Income and Program Participation, the Survey of Consumer Finances, and the Panel Study of Income Dynamics. Lastly, it summarizes recent efforts to enhance the Current Population Survey to provide more accurate figures on retirement plan coverage and participation.

Source: Bc.edu

401k Plan Design Improvements Make Retirement Savers More Resilient: Study

According to Vanguard's annual report "How America Saves," effective workplace retirement plan designs have enhanced saving behaviors among American workers. The report reveals that average savings rates among participants have reached a record high, with 45% increasing their savings rate in 2024. Lauren Valente, Managing Director of Vanguard Workplace Solutions, emphasized that modern 401k plans are focused not just on saving but on helping millions build their financial futures, highlighting the positive impact of features like auto-enrollment and higher default rates.

Source: Prnewswire.com

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403b Plans

2025 PLANSPONSOR 403b Market Survey

The traditional multi-vendor model for 403b plans, which manages over $1.5 trillion across nearly 160,000 plans and 20 million participants, presents unique information-sharing requirements. As highlighted in the 2025 PLANSPONSOR 403b Market Survey, vendors face challenges related to the SECURE 2.0 Act of 2022, particularly regarding implementation and retroactive amendments, according to Justin Londergan from Ardea Fiduciary Advisors. Unlike 401k plans, many 403b plans are sponsored by K-12 school systems and are predominantly non-ERISA plans, with ERISA 403b plans holding a larger share of assets.

Source: Plansponsor.com

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Legislative or Washington DC

Legislative Change on the Horizon: What Plan Sponsors Need to Know

As we enter the latter half of 2025, plan sponsors and professionals in the retirement industry are keeping a vigilant eye on various legislative proposals that could influence the future of 401k plans in the coming years. This year, two notable bills were introduced in the Senate -- the Helping Young Americans Save for Retirement Act and the Protecting Americans' Retirement Savings Act -- underscore the federal government's continued commitment to broadening access to retirement plans while ensuring the protection of these vital investments.

Source: Savantwealth.com

Mid-Year Regulatory and Legislative Update for DC Plan Sponsors

With regulatory and legislative priorities starting to take form, it's important to consider potential developments for the remainder of 2025 and into 2026. Initial drafts of the One Big Beautiful Bill Act did not propose any changes to retirement plan contributions or taxation. However, a key area to monitor is the inclusion of permissible investments in defined contribution plan menus, particularly regarding alternative investments and values-based investment strategies. This is a review of major issues.

Source: Ifebp.org

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Cyber and Plan Security

Fred Reish on DOL Cryptocurrency Guidance

The DOL issued Compliance Assistance Release 2022-01, which raised concerns among plan sponsors and fiduciaries regarding the integration of cryptocurrencies in participant-directed plans. However, on May 28 of this year, the DOL’s EBSA rescinded that CAR. This action is expected to alleviate some, though not all, of the concerns surrounding this issue. This article examines both pieces of guidance and explores the potential implications of these developments.

Source: Fredreish.com

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Compliance and Regulatory

Plan Forfeitures: Recent Lawsuits Create Uncertainty

In recent years, there has been a rise in class-action lawsuits questioning the appropriate use of plan forfeitures in 401k and similar defined-contribution plans. Forfeitures occur when employees leave before fully vesting in employer contributions, and many plans use these funds to offset future employer contributions. However, the lawsuits argue that this practice may violate ERISA. While the outcomes of these cases remain uncertain, plan sponsors and fiduciaries are advised to monitor the situation, review their plan documents, and consider amendments to mitigate potential risks.

Source: Orba.com

Form 5500 Season is in Full Swing: Are Wheels Turning (or are They Spinning)?

The Form 5500 is an annual report required by the DOL and the IRS for most retirement plans, like 401k plans, and certain health care plans. Accurate and timely filing is crucial, as both the DOL and IRS can impose substantial penalties for errors or late submissions. These agencies use Form 5500 to identify plans for potential audits, often targeting those with entries that are inconsistent or illogical. The article provides reminders and tips to help decrease the likelihood of being selected for an audit by the DOL or IRS.

Source: Hawleytroxell.com

Coming Soon: Mandatory Roth Treatment of Catch-up Contributions for High Earners

The SECURE Act 2.0 introduces a significant change to the tax treatment of catch-up contributions for older retirement plan participants, effective January 1, 2026. Individuals with prior year FICA wages over $145,000 will be required to make catch-up contributions as Roth contributions, meaning they will be taxed upfront rather than at withdrawal. This change alters the previously straightforward rules regarding catch-up contributions. The article outlines the differences in catch-up provisions before and after the SECURE Act 2.0, explains when catch-up contributions occur within plan operations versus participant elections, and offers guidance on adapting to these new rules.

Source: Newfront.com

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Marketplace News

Aronowitz Clears Senate Committee Vote to Head EBSA

Great Gray's New TDF Solution to be Powered by BlackRock's Proprietary Glidepath

Vestwell Partners with Amazon's DSP Program to Deliver Retirement Services

This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted.