Court on What Constitutes a Prudent Fiduciary Committee Process
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Insight: Studies, Research, Analysis, or Papers
Items of Special Interest to Advisers or Other Service Providers Court and Legal
Legislative or Washington DC
Cyber and Plan Security Compliance and Regulatory
Marketplace News Summaries Fiduciary and Plan Governance Court on What Constitutes a Prudent Fiduciary Committee Process On June 26, 2025, the U.S. District Court for the District of Massachusetts ruled in favor of Natixis Investment Managers and its fiduciary committee in the case Waldner v. Natixis Investment Managers, L.P., et al. The plaintiffs claimed that the defendants violated their ERISA duties by including underperforming proprietary funds in the 401k plan. However, after a full trial, the court sided with the defendants on all counts, emphasizing the importance of a "prudent process" in managing the fund menu. The ruling focused on the prudence issues raised by the plaintiffs' allegations. Source: Octoberthree.com Plan Sponsors Shift Priorities to Cybersecurity, AI A recent Escalent report highlights that fewer defined contribution plan sponsors are prioritizing cost reduction. Only 40% of plan sponsors identified decreasing costs as a key focus for the upcoming year, down from 50% in 2024. Instead, attention is shifting towards cybersecurity and artificial intelligence due to increasing concerns about data breaches and cyberattacks. The report reveals that 70% of plan sponsors and 10% of large-mega plans experienced a 401k-related data breach in the past year. Cybersecurity threats were reported as the primary concern for 52% of surveyed sponsors, surpassing worries about underperforming investment options (45%) and inadequate employee retirement savings (43%). Source: 401kspecialistmag.com As changes and risks increase for plan sponsors and fiduciaries, they can no longer ignore the specifics of vendor contracts. It is crucial for them to ensure that their expectations align with the contract terms. Additionally, they should have legal counsel review these contracts before signing to identify any limitations on vendor liability or performance obligations. As the landscape evolves and fiduciaries face greater financial exposure, the consequences of not addressing these issues proactively could become significantly detrimental. Source: Bostonerisalaw.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, or Papers Things I Worry About: Private Funds and 401k Plans The private fund industry is seeking to gain access for its funds to be included in 401k plans. While a discussion on the benefits of private fund investments is more suited for investment professionals rather than legal experts, there are significant legal considerations under ERISA that affect the inclusion of these investments in participant-directed plans. This article explores some of those legal challenges. Source: Fredreish.com What Can the DC Universe Learn From Annuities in 403b Plans? It's Complicated The defined contribution community commonly recognizes the complexity of annuities, with over half of plan sponsors in a January 2024 Greenwald Research survey stating that they find annuities too complicated. This complexity encompasses not only the functionality and costs of the products but also determining the most suitable options and understanding participant demand. As DC plan sponsors weigh their options -- ramping up promotion of existing annuities or developing new ones in response to shifting demand and loosened rules -- they would do well to examine how annuities have long been used in 403b plans. But the lessons there, too, are nuanced. Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers or Other Service Providers DOL Considering PEP Rulemaking The DOL has submitted a Request for Information regarding pooled employer plans to the White House's Office of Management and Budget. This submission, made on July 1, is at the pre-rule stage and aims to gather input on implementing ERISA amendments from the SECURE Act. The DOL plans to consult with various stakeholders, including employers, employees, and retirement plan service providers, to identify areas where guidance could aid in establishing and operating PEPs. Source: Psca.org Part of Rollover Rule Vacated by Federal Court A federal judge has formally set aside part of the Department of Labor's investment advice regulation, specifically regarding the interpretation of a rollover recommendation as the beginning of a series of transactions that could be deemed a "regular basis." This ruling marks the second time a federal court has reinstated the traditional understanding of what constitutes "regular basis." While fiduciary responsibilities still apply to advice given to plan participants regarding rollovers, a rollover recommendation made by an advisor without an existing relationship will remain a distinct issue. Source: Asppa-net.org Court and Legal DOL Issues Brief Defending Employer Forfeiture Practices The DOL, along with industry trade associations and business groups, filed an amicus brief supporting plan sponsors in the Hutchins v. HP, Inc. lawsuit. The brief encourages the Ninth Circuit Court of Appeals to uphold a lower court's decision regarding HP's use of forfeited funds. Paul Hutchins, a participant in HP's 401k plan, claimed that from 2019 to 2023, HP improperly used these forfeited funds -- linked to unvested employer contributions -- to fulfill its own matching contributions instead of covering plan administrative fees. Hutchins argued that this practice violated HP's fiduciary duties under ERISA. Source: 401kspecialistmag.com Implications and Action Items for ERISA Attorneys Following Cunningham v. Cornell University The U.S. Supreme Court's decision in Cunningham v. Cornell University significantly lowers the pleading standard for prohibited transaction claims under ERISA. This ruling allows plaintiffs to advance their claims by merely alleging common practices among employee pension plan sponsors, such as using plan assets to pay recordkeepers. The Court identified tools to help combat meritless litigation, but these tools will need further refinement by district courts. As a result, ERISA plan fiduciary counsel should familiarize themselves with these tools, especially in relation to the Federal Rules of Civil Procedure. Source: Verrill-law.com Stifel Slapped With 401k Fiduciary Breach Suit A new lawsuit claims that plan fiduciaries acted unreasonably, resulting in significant financial losses for the Plan and its participants. The lawsuit indicates that as a "jumbo" plan, with over $1.3 billion in assets, the fiduciaries had the ability to negotiate for quality, low-cost services but failed to do so. Additionally, it accuses them of not taking timely action to reduce Plan expenses and allowing excessive charges for services from 2019 to 2023. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Legislative or Washington DC Breaking Down the One Big Beautiful Bill's Impact on Employee Benefits On July 4, 2025, Donald Trump signed the One Big Beautiful Bill into law, which includes significant employee benefits provisions alongside major tax reforms. Key highlights of the OBBB include: expanded access to health savings accounts and eligible expenses; confirmation of first-dollar coverage for telehealth services under high-deductible health plans; and a permanent increase in the annual contribution limit for dependent care flexible spending accounts for the first time since 1986. These benefits-related changes will take effect on January 1, 2026. The update provides an overview of these provisions and outlines actions employers should consider for their employee benefit plans in anticipation of these changes. Source: Seyfarth.com Retirement Industry Mostly Applauds "Big Beautiful Bill" The retirement industry has largely welcomed the passage of the "Big Beautiful Bill," but the legislation gives the sector little to shout about.. The legislation expands health savings accounts and fulfills part of President Trump’s campaign promise by providing a temporary deduction of up to $6,000 for individuals aged 65 and older who earn under $75,000 yearly (or under $150,000 for married couples). However, changes to the defined contribution retirement plan sector remain minimal. Source: Plansponsor.com Top 10 Benefits-Related Impacts of the One Big Beautiful Bill Act On July 4, 2025, President Trump signed the One Big Beautiful Bill Act, which includes various tax incentives for paid family leave, employer-provided child care, telehealth services, and education benefits. The act makes several tax credits from the Tax Cuts and Jobs Act of 2017 permanent, which may encourage more employers to offer related benefits. The article highlights key aspects of the budget reconciliation package relevant to employers and benefit plan sponsors. Source: Ifebp.org »» Click here for more on Legislative and Washington Actions Cyber and Plan Security Seven Common 401k Cybersecurity Threats Fiduciaries Must Understand Fiduciaries often consider risks like market volatility and regulatory changes, but they must also focus on the growing threat of cybercrime, which targets 401k plans. Cybercriminals see these plans as prime targets due to the sensitive data and significant financial assets they hold. Understanding cybersecurity threats is essential for fiduciaries to adhere to their governance responsibilities under ERISA. The article outlines seven common cybersecurity threats that fiduciaries need to recognize to safeguard participants' retirement savings. Source: Fiduciarynews.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory The Truth About Auto-Portability: Better Alternatives The text discusses the challenges and considerations associated with auto-portability in retirement plans, particularly regarding early lump sum distributions and their impact on individuals' financial futures. It suggests there may be better alternatives than auto-portability to achieve the desired benefits. One alternative requires engagement from those involved in the initial stages of auto-portability, while the other calls for a collaborative effort within the community. This article reviews the alternatives. Source: Penchecks.com Guidance Needed on Catch-up Contributions Under Roth Mandate: AICPA The AICPA has sought further guidance from the Treasury and the IRS concerning catch-up contributions designated as Roth contributions, as outlined in Section 603 of the SECURE 2.0 Act of 2022. In a letter dated July 1, the AICPA addressed proposed regulations issued in January that include updates related to these statutory changes, referred to as the Roth mandate. This mandate requires that catch-up contributions from eligible employees, who meet a certain income threshold, be designated as Roth contributions within employer-sponsored retirement plans. Source: Journalofaccountancy.com »» Click here for more Compliance and Regulatory Material Marketplace News Transamerica, TIAA and Nuveen Join Forces on Plan Investment Options LeafHouse, Capital Group Team Up for Customized TDF Solution Capital Group Enhances SMB Retirement Plan Service Capabilities State Street Global Advisors Rebrands as State Street Investment Management
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