Managing Retirement Plan Litigation Risk: Know Your IPS
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Headlines Fiduciary and Plan Governance
Court and Legal
Cyber and Plan Security Compliance and Regulatory
Marketplace News Summaries Fiduciary and Plan Governance Managing Retirement Plan Litigation Risk: Know Your IPS A recent court case, Macias v. Sisters of Charity of Leavenworth Health System, highlights the importance for retirement plan sponsors to adhere strictly to their Investment Policy Statements. The Colorado federal district court denied the defendants' motion to dismiss the case, which was based on claims that they failed to evaluate the performance of their plan's investments annually as required by the IPS. This ruling emphasizes the need for plan sponsors to not only document their investment strategies in writing but also ensure they follow through on them to mitigate legal risks. Ultimately, even if sponsors believe they might win a case, the costs of litigation often lead to settlements, making adherence to processes critical to reduce potential liabilities. Source: Benefitsnotes.com Fiduciary Red Flags: Navigating the DOL's Guidance on Crypto Assets As interest in digital assets and cryptocurrencies grows among individual investors, retirement plan sponsors are exploring the potential inclusion of crypto in 401k investment options. The DOL has recently released guidance regarding cryptocurrency investments in retirement plans. Advisors are encouraged to educate plan sponsors on the associated risks and regulatory changes. When clients inquire about crypto investments, advisors should engage them in discussions about the specific risks of cryptocurrencies, considering the investment options and the needs of participants. Source: Spconsultants.com The Rise of CITs: What ERISA Plan Fiduciaries Should Know Collective Investment Trusts have gained popularity among fiduciaries of ERISA plans who are looking to reduce investment management fees. But what exactly are CITs, and what considerations should fiduciaries keep in mind before investing in them? In this article, attorney Michael T. Joliat delves into the distinguishing features of CITs compared to other investment vehicles and provides a framework for evaluating their suitability for inclusion in ERISA plans. Source: Ifebp.org Many believe that recent regulatory actions aimed at incorporating private equity and alternative assets into 401k plans may not lead to their actual inclusion, but this view may be overly optimistic. Given the financial industry's current push towards 401k assets, plan sponsors and fiduciaries must prepare for the possibility of integrating private equity while minimizing potential litigation and fiduciary liability risks. This shift recalls a prior era when legal advice emphasized the importance of having a documented, reasonable process to defend against breach of fiduciary duty claims. Source: Bostonerisalaw.com »» Click here for more Fiduciary and Plan Governance Material Court and Legal Revisiting the State of the Law in ERISA Forfeitures Cases On July 14, 2025, a Legal Update was released that reviewed recent developments in ongoing ERISA forfeiture lawsuits, highlighting new motion to dismiss rulings and an increasing number of pending appeals. This new update notes that, despite a focus on recent legal changes, there has been a surge in new forfeiture lawsuits, with at least seven additional cases filed, bringing the total to nearly 70. An updated list of 22 motion to dismiss rulings is provided and discussed in detail. Source: Mayerbrown.com Ninth Circuit Weighs Employer's Use of Non-Vested 401k Funds Employers have traditionally used non-vested employer contributions, or forfeited assets, to offset future contributions to their 401k plans. However, this practice has come under scrutiny, as some plaintiffs argue that it violates ERISA by suggesting those assets should instead offset plan participant expenses. While district courts have generally upheld the practice of using forfeited assets to reduce future employer contributions, the issue is currently being appealed for the first time before the Ninth Circuit. Source: Swlaw.com Second Circuit Tightens Standing Rules for Breach of Fiduciary Duty Class Actions Standing issues frequently arise in class actions against fiduciaries of retirement benefit plans, specifically regarding the type of harm a plaintiff must demonstrate to bring a suit. Key questions include whether the harm must be personal, if it needs to be uniform among class members, and the level of proof required. A recent decision from the Second Circuit addressed these concerns, involving plaintiffs Gail Collins, Dean DeVito, Michael Lamoureux, and Scott Lobdell, participants in The Northeast Grocery, Inc. 401k Savings Plan. They filed a seven-count complaint alleging that the fiduciaries of the plan breached various ERISA duties in its management. Source: Yourerisawatch.com ERISA Class Action Against Novo Nordisk Partially Dismissed A federal judge in New Jersey dismissed a class action lawsuit brought against Novo Nordisk Inc. regarding alleged mismanagement of a $1.2 billion employee retirement plan under ERISA. The lawsuit, filed by employees John Fumich, Laura Mischley, Raphael Hinton, Ronnie McLean, and Thomas Chaffin, claimed that the company failed to adequately review investment options in its 401k Savings Plan since September 13, 2018. The case was heard in the U.S. District Court for the District of New Jersey. Source: Planadviser.com $1.6M Settlement Reached in Jack Henry & Associates ERISA Class Action Jack Henry & Associates Inc. and its 401k retirement committee have reached a $1.6 million settlement in a class action lawsuit alleging fiduciary duty breaches under the Employee Retirement Income Security Act. The lawsuit was initiated by plan participants Guy LaCrosse and Jojemar Mendoza, who claimed that the company allowed excessive recordkeeping and administrative fees in its 401k Retirement Savings Plan and improperly retained the Prudential Guaranteed Income Fund for participants. From 2017 to 2022, the retirement plan reportedly incurred over $2 million in recordkeeping and administrative fees, averaging $78 per participant. Source: Planadviser.com RTX Latest Target of Forfeiture Fiduciary Breach Claims A new lawsuit has been filed against RTX Corp., previously known as Raytheon Technologies Corp., concerning its 401k plan. The plaintiffs, Melissa Jacob and Thomas Miller, along with other participants and beneficiaries, allege violations of ERISA. They accuse the defendants of not adhering to plan documents, breaching fiduciary duties of loyalty and prudence, utilizing plan assets for the employers' benefit, mismanaging plan assets for personal interests, and facilitating prohibited transactions. The case is identified as Jacob v. RTX Corp. in the Eastern District of Virginia. Source: Napa-net.org »» Click here for more Court and Other Legal Issues Cyber and Plan Security In our increasingly interconnected world, cybersecurity has evolved from a mere IT concern to a fundamental business responsibility. For retirement plan sponsors, the risks are particularly significant as they must protect sensitive participant information, financial assets, and their organization's reputation. This article delves into the basics of cybersecurity, its importance, and strategies organizations can implement to protect their systems and safeguard participants' data. Source: Consultrms.com »» Click here for more on Cybersecurity Issues Compliance and Regulatory Understanding Plan Participant Disclosures and Notices (Pt. 1 of 3) Plan sponsors must provide essential communications and disclosures to plan participants to ensure transparency and protect their interests. Watkins Ross has compiled a list of key required notices and disclosures for defined contribution plans, along with distribution deadlines to support plan sponsors in their responsibilities. Source: Watkinsross.com Big Catch-Up Contribution Changes Coming in 2026 Starting January 1, 2026, new regulations will impact catch-up contributions for Highly Paid Individuals under SECURE 2.0. HPIs contributing to 401k, 403b, or governmental 457b plans will be required to make catch-up contributions on a Roth basis. While the Internal Revenue Service has released proposed regulations to guide plan sponsors on these changes, final regulations have yet to be issued. In the interim, plan sponsors are advised to adhere to the proposed regulations in good faith. Source: Ferenczylaw.com Navigating the Minefield: Cash Reconciliation in 401k Recordkeeping Migrations Migrating between 401k recordkeepers is a complex process. Although the primary attention usually centers on the seamless transfer of participant data, investment funds, and loan balances, cash reconciliation often becomes an overlooked area where operational risks can emerge. Inadequate reconciliation of cash inflows, outflows, and trades during the transition period can result in service disruptions, uninvested funds, audit issues, and potential compliance violations. Source: Enterpriseiron.com New Kids on the Blockchain: Cryptocurrencies in 401k Accounts Recent years have seen significant fluctuations in the DOL regulatory stance regarding investment options in 401k plans. Under the Biden administration, the DOL's Compliance Assistance Release No. 2022-01 aimed to discourage the inclusion of cryptocurrencies and digital assets in retirement plans, fundamentally shifting from a previously neutral policy. However, in May 2025, the DOL, led by Trump-appointed Secretary Lori Chavez-DeRemer, rescinded the CAR, reinstating a neutral position on investment types, emphasizing that investment decisions should be determined by fiduciaries rather than government officials. Additionally, in August, the Trump administration issued an executive order promoting alternative assets for 401k investments. Despite these changes, it remains uncertain whether the DOL's actions or the EO will significantly influence fiduciary practices. Source: Carltonfields.com DOL Rescinds Guidance on ERISA Plan Sponsor Vendor Diversity Program The DOL has revoked its previous 2023 guidance endorsing racial equity programs that aimed to increase diversity among asset managers for retirement plans. In a new 2025 opinion, the DOL asserted that such diversity programs are illegal, constituting unlawful discrimination under federal civil rights laws. Consequently, the DOL rescinded the earlier opinion and instructed plan sponsors to eliminate any illegal activities associated with these vendor diversity programs. The DOL emphasized that ERISA does not protect plan sponsors or fiduciaries from civil rights law applications. Plan sponsors and fiduciaries should note that the former advisory opinion is no longer valid and should not be used to justify the inclusion of racial equity criteria in selecting service providers. Source: Morganlewis.com »» Click here for more Compliance and Regulatory Material Marketplace News Hessel & Associates, LLC, joins Daybright Financial Human Interest Doubles Down on Unique Customer Service Guarantee
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