This guide serves as a concise reference outlining the SECURE 2.0 provisions that allow plan sponsors to terminate a SIMPLE IRA mid-year and transition to a safe harbor 401k replacement plan.
Major 401k recordkeepers are competing to provide plan participants access to billions in cash that employers want to allocate under new regulations from the SECURE Act 2.0. Fidelity Investments has initiated a 401k program designed to offer "free money" to individuals with negative net worth, allowing employers to match contributions that directly pay down student debt. Following suit, Charles Schwab Corp. announced it would implement a similar program in partnership with Candidly, a 2016 startup, aimed at supporting millions of young employees who previously lacked access to such options.
A federal judge has approved a request from plan fiduciaries for costs in a dismissed excessive fee lawsuit originally filed in 2022 by participant-plaintiff Guillermina Lopex against Embry-Riddle Aeronautical University, Inc. The lawsuit claimed that the fiduciary defendants included more expensive funds in the $500 million retirement plan than necessary, given the availability of cheaper alternatives. Although it's a positive development for fiduciaries to seek cost recovery after litigation, the judge ultimately reduced their request by half, noting that the lawsuit appeared flawed from the beginning and failed to substantiate its claims after multiple attempts.
A lawsuit has been filed by a former participant on behalf of the Teachers Insurance and Annuity Association of America 401k Plan and TIAA Retirement Plan, alleging multiple breaches of fiduciary duty under ERISA. The suit targets TIAA, its Board of Trustees, the Plan Investment Review Committee, and unknown defendants (John Does 1–30). The allegations state that TIAA has retained proprietary in-house managed funds with a higher-cost share class in the Plans, despite the availability of a lower-cost share class, leading to higher fees for the Plans.
Acquiring a company with a 401k plan involves significant risks, especially with recent legal changes and trends. Buyers must understand these developments to avoid harming employees or exposing their 401k plan to prior liabilities. Conducting thorough due diligence on the seller's 401k plan is crucial for making informed decisions and minimizing legal risks.
The U.S. House Financial Services Committee has passed H.R. 1013, the Retirement Fairness for Charities and Educational Institutions Act of 2025, with a vote of 43 to 8. This bipartisan bill seeks to permit 403b retirement plans, typically utilized by nonprofit employees, to invest in collective investment trusts, thus bringing their investment choices in line with those offered by 401k plans.
The new Voluntary Fiduciary Correction Program introduces a Self-Correction Component that allows practitioners to use the DOL Calculator for self-correction of errors. In return for the self-correction, plan sponsors will receive an email acknowledgment of receipt rather than a "no-action" letter. The key difference between self-correction submissions and traditional VFCP filings is that self-correction only requires the retention of supporting documents, while filings necessitate the submission of those documents. Despite the difference, self-correctors must still prepare and keep all documentation as if filing a regular VFCP application.
The House Financial Services Committee is holding a two-day session to mark up four bipartisan bills aimed at modernizing retirement plans, improving retail investor access to private markets, lessening regulatory burdens, and protecting seniors from financial fraud. Key bills include the Retirement Fairness for Charities and Educational Institutions Act (HR 1013) and the Improving Disclosure for Investors Act (HR 2441), both prioritized by the Insured Retirement Institute and the Investment Company Institute. Additionally, IRI supports the Senior Security Act (HR 1469), and ICI advocates for the Increasing Investor Opportunities Act among the many bills being considered.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
