Harnessing AI Under ERISA: A Compliance and Oversight Guide
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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
MEPs and PEPs
Compliance and Regulatory Marketplace News Summaries Fiduciary and Plan Governance Harnessing AI Under ERISA: A Compliance and Oversight Guide Artificial intelligence is significantly transforming various aspects of business, including employee benefit plans. It offers opportunities such as automating plan administration and personalizing participant communications. However, this also introduces new responsibilities for those managing ERISA-covered retirement and health plans. Plan sponsors and fiduciaries need to understand how AI aligns with their legal obligations under ERISA and must take proactive measures to use this technology responsibly to enhance participant outcomes. Source: Benefitslawadvisor.com Forfeitures and Fiduciary Risk: What Plan Sponsors Need to Know Now Forfeitures in 401k plans, often overlooked, are now gaining attention due to recent class-action lawsuits targeting how plan sponsors handle these funds. Traditionally, many plans have used unvested employer contributions leftovers from early-leaving employees to offset future contributions, following IRS guidance. However, some lawsuits argue that this practice could breach ERISA's fiduciary standards. While the outcome of these legal challenges is uncertain, plan sponsors and fiduciaries should proactively review their procedures regarding forfeitures. Source: Jdsupra.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, or Papers 60% of Global DC Plan Sponsors Cite Concerns Over Members' Retirement Income: Report According to a recent WTW report, 60% of global defined contribution plan sponsors identify the adequacy of members' retirement income as the primary challenge for DC plans over the next decade. The report, which analyzed nearly 30 global DC plans with more than $6.3 trillion in assets, highlighted that concerns are particularly prevalent in regions with low minimum contribution levels or where auto-enrollment is misinterpreted as sufficient for retirement savings. Several plans are increasingly focusing on retirement adequacy rather than merely on coverage and participation, indicating a shift towards more comprehensive reform and public awareness in this area. Source: Benefitscanada.com Why Do Small Businesses Rarely Claim Tax Credits for Offering Retirement Plans? U.S. policymakers have introduced various incentives to increase retirement plan coverage in the private sector, especially for small businesses, notably through the Section 45E tax credit, which helps cover the costs of establishing and managing employer-sponsored retirement plans. However, a new study indicates that take-up of this credit is very low, with fewer than 6 percent of eligible firms claiming it even in recent years. The study, based on detailed IRS data, suggests that the likelihood of claiming the credit is influenced significantly by the characteristics of firm owners and their tax preparers, pointing to potential informational and behavioral barriers that affect decision-making. Source: Georgetown.edu Charles Schwab's annual survey reveals that retirement savings confidence among 401k participants is declining, primarily due to inflation, which is a concern for 57% of respondents. The percentage of participants feeling "very likely" to meet their savings goals has dropped from 43% to 34%. Despite financial challenges, most 401k investors are not cutting their contributions; only 11% have reduced them. Instead, many are adjusting their spending habits by making fewer purchases (40%) and opting for cheaper products (39%). Additionally, the use of 401k loans and hardship withdrawals has decreased from 26% to 21% over the past year. Source: Schwab.com Debt Weighs Heavy on Plan Sponsors, Employees A comprehensive assessment of financial wellness must consider debt. Recently, a Texas federal judge approved the Trump administration's request to eliminate regulations from the Biden administration that aimed to remove $49 billion in medical debt from the credit reports of almost 15 million consumers. Additionally, interest on student loans resumed on August 1 for 7.7 million borrowers in the income-driven Saving on a Valuable Education Plan, following a ruling by the U.S. 8th Circuit Court of Appeals that struck down the program in April. "For employers, this isn't really just a credit issue," says Todd Lacey, president of Financial Finesse. "It's a wellness issue." Source: Plansponsor.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers or Other Service Providers Dear Plan Providers: Here's the Kind of Content Plan Sponsors Actually Want As a plan provider -- whether you're an advisor, TPA, recordkeeper, or pooled plan provider -- you've likely encountered the familiar advice to "create content that keeps you top of mind with plan sponsors." But what type of content truly resonates? The key is that plan sponsors are not interested in dense white papers filled with technical jargon. Instead, they prefer practical, easy-to-understand materials that answer the question, "What should I know or do now?" Here are five effective types of content you should be producing. Source: Jdsupra.com Court and Legal Using Interlocutory Appeals to Reduce the Scope and Cost of ERISA Class Action Litigation The writer emphasizes the need for an updated approach to excessive fees and class action litigation under ERISA, suggesting that the traditional litigation methods used by plan sponsors are outdated. He highlights the Supreme Court's decision in Cunningham v. Cornell as an opportunity for defendants to adopt a new strategy. This includes using federal practice tools to encourage district courts to take greater control over class action cases early in the process and to address critical issues sooner, rather than waiting for costly and lengthy discovery at the summary judgment stage. Source: Bostonerisalaw.com Forfeitures Cases Proceed With Mixed Results and DOL Weighs In Approximately 65 class action lawsuits have been filed against 401k plan fiduciaries, alleging that they improperly used participant forfeitures to offset employer contributions instead of covering plan expenses, which were ultimately paid by participants. Although the IRS has previously approved such practices for offsetting employer-matching contributions, a compelling argument has emerged: if a plan document allows fiduciaries the discretion to either benefit the employer or the participants through the use of forfeitures, failing to favor participants may constitute a breach of fiduciary duty. Source: Captrust.com Another Forfeiture Case Dismissed A federal judge has dismissed a lawsuit alleging fiduciary breach related to the use of plan forfeitures to offset employer contributions. The defendants, Siemens Corp., argued in their October 2024 motion that the plaintiff's claims represented a "novel and untenable theory" contrary to established ERISA rules concerning defined contribution plans. The plaintiff claimed that the defendants had discretionary control over the distribution of plan forfeitures, mirroring issues raised in numerous similar cases. Source: Psca.org The Forfeiture Fiasco: Why the DOL and Common Sense are on the Right Side of the HP Case It's rare to witness the DOL stepping into legal battles to support plan sponsors, but when it does, it usually signifies a more significant issue than just the complaint of an individual plan participant. This was the case in Hutchins v. HP, Inc., a lawsuit that has highlighted one of the longstanding and often misinterpreted practices in defined contribution plans: forfeitures. Source: Jdsupra.com »» Click here for more Court and Other Legal Issues Legislative or Washington DC Executive Order Directs Regulators to Expand Access to Alternative Assets in 401k Plans On August 7, 2025, President Donald J. Trump signed an Executive Order titled "Democratizing Access for 401k Investors." This order emphasizes the importance of providing all Americans with access to alternative investments to enhance their retirement savings. It directs federal agencies, including the DOL and the SEC, to review regulatory guidance that restricts 401k plan participants from investing in alternative assets such as private equity, real estate, and infrastructure, which are commonly used by defined benefit plans. While the Executive Order doesn't change existing laws, it represents a significant policy shift aimed at expanding investment options for over 90 million Americans in employer-sponsored defined contribution plans. Source: Groom.com Senators Urge DOL to Reinstate Cryptocurrency Guidance for 401k Plans In 2022, the DOL under former President Joe Biden cautioned fiduciaries against including cryptocurrency options in 401k plans due to their risks. However, this guidance was rescinded in May 2025. Following this change, four prominent Democratic Senators are urging DOL Secretary Lori Chavez-DeRemer to acknowledge the extreme volatility of cryptocurrency and its inappropriateness as a retirement investment. Source: Hallbenefitslaw.com »» Click here for more on Legislative and Washington Actions MEPs and PEPs DOL Guidance Looks to Boost PEPs, Signals Potential PEP Fiduciary Safe Harbor The DOL has released guidance titled "Pooled Employer Plans: Big Plans for Small Businesses." This guidance aims to encourage the establishment and adoption of pooled employer plans by outlining how PEPs can help reduce fiduciary risks for employers. Additionally, the DOL is seeking public input through a request for information on various questions related to PEPs. Source: Erisalitigation.com Pooled Employer Plans (PEPs): Questions to Ask When Selecting A pooled plan provider is designated in a retirement plan as a fiduciary under ERISA, responsible for administration and ensuring compliance with ERISA and Internal Revenue Code requirements. The Department of Labor has provided guidance for small business owners to help them select a pooled employer plan, offering important questions to consider during the selection process. Source: Ifebp.org »» Click here for More MEP and PEP Material Compliance and Regulatory Roth Catch-Up Mandate and Controlled Groups: Peeling the Onion In early 2025, Alight hosted a blog post and webinar discussing the impact of various payroll systems on retirement plans, particularly in relation to the Roth catch-up rule. Following these discussions, clients raised concerns about how this rule affects retirement plans within controlled groups participating in a single defined contribution plan. Proposed IRS rules from January 2025 revealed that the implications of this situation are more complicated than anticipated. Source: Alight.com »» Click here for more Compliance and Regulatory Material Marketplace News IRALogix Builds Retirement Plan Platform for Small, Midsize Businesses Law Firms McDermott Will & Emery and Schulte Roth & Zabel Merge Human Interest to Receive up to $50M Investment From Morgan Stanley Axios Advisory Group Joins EdgeCo's AmericanTCS Business Unit
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