As we enter the latter half of 2025, plan sponsors and professionals in the retirement industry are keeping a vigilant eye on various legislative proposals that could influence the future of 401k plans in the coming years. This year, two notable bills were introduced in the Senate -- the Helping Young Americans Save for Retirement Act and the Protecting Americans' Retirement Savings Act -- underscore the federal government's continued commitment to broadening access to retirement plans while ensuring the protection of these vital investments.
On May 1, 2025, the U.S. Court of Appeals for the Fifth Circuit upheld the dismissal of a breach of fiduciary duty claim against Entergy Corporation's Employee Benefits Committee. The court found that the Committee correctly disclosed the policy that marriage voids prior beneficiary designations unless a spousal waiver is provided. Since the plan sponsor did not obtain a spousal waiver from the participant's second spouse before the participant's death, the Committee was justified in disbursing approximately $3 million from the participant's 401k account to the second spouse instead of his adult children, as indicated on the participant's last beneficiary form.
With regulatory and legislative priorities starting to take form, it's important to consider potential developments for the remainder of 2025 and into 2026. Initial drafts of the One Big Beautiful Bill Act did not propose any changes to retirement plan contributions or taxation. However, a key area to monitor is the inclusion of permissible investments in defined contribution plan menus, particularly regarding alternative investments and values-based investment strategies. This is a review of major issues.
Prudential Insurance Co. of America has filed an appellate brief with the U.S. Court of Appeals for the Third Circuit, supporting a lower court's summary judgment in a class action lawsuit. The lawsuit, Young Cho v. Prudential Insurance Co. of America, involves allegations from plaintiff workers that Prudential violated its fiduciary duties under ERISA by making imprudent investment decisions, leading to significant losses in retirement plan investments. Prudential argues that the workers' claims are speculative and commended the lower court for its thorough application of the summary judgment standard based on the evidence of Prudential's prudent fiduciary practices.
J.P. Morgan Asset Management's sixth U.S. DC plan sponsor survey reveals a stronger commitment among plan sponsors to improve retirement outcomes and provide essential financial tools for participants. The research, titled "Scaling What Works, Shaping What's Next," includes insights from 750 U.S. plan sponsors and shows an uptick in financial wellness initiatives and innovative retirement income strategies. The findings highlight the impact of generational differences on retirement planning, with plan sponsors recognizing the diverse needs of Gen X, Millennials, and Gen Z. Notably, only 22% of plan sponsors with a significant Gen X workforce feel confident that these employees are adequately saving for retirement, indicating a need for targeted support strategies for this group as they approach retirement.
The traditional multi-vendor model for 403b plans, which manages over $1.5 trillion across nearly 160,000 plans and 20 million participants, presents unique information-sharing requirements. As highlighted in the 2025 PLANSPONSOR 403b Market Survey, vendors face challenges related to the SECURE 2.0 Act of 2022, particularly regarding implementation and retroactive amendments, according to Justin Londergan from Ardea Fiduciary Advisors. Unlike 401k plans, many 403b plans are sponsored by K-12 school systems and are predominantly non-ERISA plans, with ERISA 403b plans holding a larger share of assets.
Retirement savings plans are essential for wealth-building in the U.S., with most of the $20.8 trillion in retirement savings coming from employer-sponsored programs like 401ks. However, nearly 56 million private sector workers lack access to these benefits, hindering their ability to plan for retirement. Expanding access and participation in workplace retirement savings could help families secure their financial futures and reduce future social service costs for state and local governments.
Recent confirmation hearings for the potential head of the Employee Benefits Security Administration highlighted likely future issues for retirement plans. The nominee emphasized that retirement plans and fiduciaries should operate within established fiduciary guidelines. Key regulatory priorities mentioned include: deregulating the enforcement of employee stock ownership plans, modernizing 401k investment options, enhancing cybersecurity, addressing plan forfeitures and missing participants, and expanding access to retirement and health plans.
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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.
