Summaries

Fiduciary and Plan Governance

2026 Will Test Plan Sponsors: Here Is What They Need to Consider

In 2025, plan sponsors are navigating a rapidly changing landscape due to several key developments. An executive order from the President has paved the way for private market investments in 401k plans, while the rise of AI-driven phishing attacks poses new security threats to retirement accounts. The DOL has outlined its regulatory priorities, focusing on updating the SECURE 2.0 Act's reporting requirements, providing guidance on pooled employer plans, and reevaluating previous advisories on pension risk transfers. Additionally, the appointment of Daniel Aronowitz as head of the EBSA is anticipated to bring significant changes for plan sponsors. These factors highlight the importance of being proactive and well-prepared to manage the evolving challenges in the retirement plan sector.

Source: Napa-net.org

401k Compliance: Why More Businesses are Turning to 3(16) Fiduciary Services

Providing retirement benefits, like a 401k plan, is crucial for small businesses to remain competitive and enhance profitability. However, managing such plans can be complex due to responsibilities like contributions, loan requests, and compliance. To alleviate these burdens, many business owners are opting for 3(16) fiduciary services, which specialize in daily administration and compliance. This article discusses what 3(16) services entail, the increasing compliance challenges, and key considerations for business owners when selecting a plan provider to streamline oversight.

Source: Myubiquity.com

When Does Your ERISA Plan Need an Audit?

The Form 5500 is an annual information return required for most employee benefit plans under ERISA, with penalties for failing to file imposed by both the IRS and DOL. While employers with benefit plans generally understand the necessity of filing Form 5500, the specific schedules and attachments required can differ based on the plan's size and funding.

Source: Brickergraydon.com

Auditing Merged Assets From Unaudited Retirement Plans

When large retirement plans merge assets from smaller plans during stock acquisitions or mergers, auditors must evaluate the potential operational errors from the smaller plans that could affect the financial statements of the larger plan. This assessment is especially crucial if the merged-in assets haven't been previously audited, as they may introduce "tainted" assets. Conversely, asset acquisitions and rollovers from plans that are terminated before the merger are less likely to pose this risk. The audit implications vary depending on whether the merged-in assets have been audited previously and whether the target company's plan is terminated before the merger.

Source: Belfint.com

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Insight: Studies, Research, Analysis, or Papers

2025 Retirement Plan Services Participant Outcomes Survey

Today's retirement plan participants are actively engaged in saving, goal-setting, and utilizing tools, leading to a strong sense of confidence in their progress. To assess how well participants perceive their progress towards retirement goals, eight key outcomes across four financial areas were identified and compared with actual data. The findings explore the differences in financial wellness and retirement readiness across various life stages and generations. Additionally, the paper provides actionable strategies for employers to offer personalized and relevant support, enabling participants to make informed decisions, build confidence, and achieve lasting success in their retirement planning.

Source: Schwabworkplaceservices.com

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Court and Legal

The Evolution of ERISA Forfeiture Cases

Plan sponsors are seeing a favorable trend in court rulings regarding motions to dismiss in forfeiture lawsuits, with 75% of such motions granted in favor of sponsors (18 out of 24 cases). This has led to an increasing number of appeals, with eight currently pending across four US Courts of Appeals. Despite these rulings, the plaintiffs' bar remains active, having filed six new forfeiture lawsuits in September, bringing the total to 75 since September 2023. The table here lists the 24 motion to dismiss rulings by their respective US Court of Appeals.

Source: Mayerbrown.com

Forfeiture Claim Dismissed, Excessive Fee Claim Survives in Novo Nordisk 401k Suit

A federal district court judge in New Jersey granted a partial motion to dismiss in a lawsuit involving Novo Nordisk's 401k plan, which alleged violations of ERISA. The judge dismissed claims that Novo Nordisk improperly utilized forfeited funds to cover future employer contributions and that the company included a poorly performing target date fund in the plan. Following this partial dismissal, the only remaining allegation from employees is that the company imposed excessive fees on participants in the management of its $2.3 billion 401k plan.

Source: Hallbenefitslaw.com

Judge Faults American Airlines for ESG "Influence" on 401k Plan

A federal judge has limited the role of environmental, social, and governance factors in American Airlines' 401k plan following a ruling in the case Spence v. American Airlines Inc. in the Northern District of Texas. Judge Reed O'Connor found that American Airlines engaged in fiduciary misconduct by allowing BlackRock's ESG considerations to affect the retirement plan's core index portfolios, breaching its duty of loyalty under ERISA. However, the judge determined that American Airlines did not breach its duty of prudence, as it acted in line with industry practices. Additionally, the plaintiffs could not prove monetary losses to the plan, so they were not awarded damages.

Source: Planadviser.com

District Court Enjoins 401k Plan From Considering ESG

On October 1, 2025, the US District Court for the Northern District of Texas issued a final judgment in a significant ERISA class action involving the fiduciaries of American Airlines' 401k plan. Earlier in January, the court determined that the fiduciaries breached their duty of loyalty by allowing BlackRock to pursue non-financial ESG objectives in managing certain investment trusts within the 401k plan. The case is expected to draw increased scrutiny to the proxy voting policies and procedures of ERISA plans, particularly regarding how fund managers pursue ESG objectives through proxy voting and shareholder activism.

Source: Steptoe.com

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Cyber and Plan Security

Why 401k Sponsors Must Prioritize Cybersecurity

Retirement plans are increasingly vulnerable to cyberattacks targeting sensitive personal data and substantial retirement assets. As a result, cybersecurity has become a critical fiduciary duty for plan sponsors, rather than just an IT issue. Therefore, plan sponsors must not only secure their own systems but also ensure that all vendors involved, including recordkeepers and advisors, implement strong cybersecurity measures. In a recent interview, Robert Massa from Prime Capital Financial highlighted common mistakes made by plan sponsors, emphasizing the need for greater attention to fiduciary responsibilities and cybersecurity practices.

Source: Primefinancial.com

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State-Based Private-Sector Retirement Programs

New York to Launch State Retirement Savings Program This Fall

Starting this fall, certain New York employers that do not offer a retirement benefit will need to enroll in the state's retirement savings program, as outlined by a government fact sheet. The New York State Secure Choice Savings Program is designed for private sector employees without access to a workplace retirement plan. Established in the 2018-19 state budget, the program allows payroll deductions to be deposited into Roth individual retirement accounts for employees of participating organizations.

Source: Planadviser.com

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Compliance and Regulatory

Best practices: Mandatory Roth Catch-Up Contributions

On September 15, the IRS issued final regulations under SECURE 2.0 concerning catch-up contributions. The guidance highlights the importance of coordination among stakeholders, flexible communication strategies, and active monitoring of contribution limits. It stresses the need for effective cooperation among service providers to manage variability in plan design. The article outlines industry best practices aimed at enhancing consistency, compliance, and operational efficiency among payroll providers, plan sponsors, recordkeepers, and third-party administrators.

Source: Captrust.com

Profit Sharing Allocations: Who Gets What and Why It Matters

The article explores the concept of profit sharing in 401k plans, highlighting that while employees may fantasize about receiving extra retirement contributions from their employers, the real complexity lies in how these contributions are distributed. It examines various allocation methods for profit sharing, detailing the advantages and disadvantages of each.

Source: Newfront.com

The Roth Catch-Up Regulations are Final: What You Need to Know

SECURE 2.0's Roth catch-up contribution rule has sparked controversy due to its complexity and administrative burdens for employers and third-party administrators. The IRS and Treasury released final regulations on September 15, 2025, to provide guidance for the rule's implementation, set for January 1, 2026. While the regulations become generally effective on January 1, 2027, the Roth Catch-up Rule must be enforced a year earlier. This article outlines the key provisions of these final regulations and highlights significant changes from the proposed version.

Source: Truckerhuss.com

A Playbook on the IRS's Final Regulations on the Roth Catch-Up Contribution Requirement

Many 401k plan sponsors are currently engaged in conversations with their third-party plan administrators, payroll vendors, and advisors about implementing the new Roth catch-up contribution rules that were released on September 16, 2025. This article serves as a reminder for plan sponsors to also consider their non-qualified deferred compensation plans during these discussions.

Source: Wagnerlawgroup.com

Consider Nonqualified Plans When Implementing New Roth Catch-Up Contribution Rules

Many 401k plan sponsors are currently engaged in conversations with their third-party plan administrators, payroll vendors, and advisors about implementing the new Roth catch-up contribution rules that were released on September 16, 2025. This article serves as a reminder for plan sponsors to also consider their non-qualified deferred compensation plans during these discussions.

Source: Verrill-law.com

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Marketplace News

ASG and TIFIN @Work Deliver Curated Retirement Solutions for Law Firms

Nearly 21,000 Plan Sponsors Have Adopted PSN Auto-Portability

Greenspring Advisors, Wealthstream Advisors Announce Merger

Transamerica Teams With Fiducient Advisors on New 403b PEP

T. Rowe Price Modernizes Stable Value Operations

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.