The Ninth Circuit has dismissed a 401k lawsuit filed by Intel employees, who claimed that the inclusion of private equity and hedge funds in the company's defined contribution plans breached fiduciary duties under ERISA. The court ruled that ERISA does not prohibit certain investment types in participant-directed plans. It indicated that, despite their higher fees and complexity, private fund investments can be considered prudent options based on the circumstances.
Employees have filed two lawsuits against UnitedHealth Group, alleging the company misused forfeited 401k funds to reduce its employer contributions, violating ERISA. The first lawsuit, Kotalik et al. v. UnitedHealth Group Inc. et al., claims UHG used these funds for employer contributions instead of administrative expenses. The second lawsuit, Holly Hendrickson v. UnitedHealth Group, alleges similar improper retention of forfeited funds. This follows a previous class action lawsuit, Snyder v. UnitedHealth Group, which UHG settled for $69 million after litigation revealed the company prioritized low-performing target-date funds to maintain relationships with Wells Fargo.
The Trump administration has reversed Biden-era guidance that cautioned against including cryptocurrency in 401k investment options. This allows retirement investors to access digital assets like Bitcoin and Ethereum through their 401ks. The previous advice urged plan fiduciaries to be very cautious about adding crypto options. The rollback may encourage more plan sponsors to offer these investments, but since sponsors still have fiduciary obligations, widespread adoption of cryptocurrency in 401k plans may not happen immediately.
The article emphasizes the importance of 401k cybersecurity compliance in light of modern threats such as phishing, ransomware, and deepfakes. Given that cybersecurity poses significant risks to retirement plans, fiduciaries can no longer regard it solely as an IT issue; it is now considered an integral part of prudent plan management and an implied fiduciary duty under ERISA. The article outlines practical measures that fiduciaries can take to ensure cybersecurity compliance and protect participants' savings from potential breaches.
Good plan governance is essential for effectively meeting ERISA fiduciary responsibilities, as it outlines responsibilities, deadlines, and accountable parties. The article discusses nine key areas that encompass effective plan governance.
Since 2023, there has been a surge of class-action lawsuits alleging violations of fiduciary duties under ERISA concerning the management of 401k forfeitures. Plaintiffs claim that those responsible for deciding the use of forfeited funds have a fiduciary duty to the plan participants who remain in the plan. They argue that ERISA mandates these decisions prioritize the interests of participants, particularly in reducing administrative costs. Some plaintiffs have had limited success in overcoming motions to dismiss their cases, highlighting the legal vulnerabilities in the handling of 401k forfeitures. Fortunately, if you sponsor a plan that allows discretion in how to use forfeitures, there are several options to reduce litigation risk concerning their use.
On July 4, 2025, President Trump enacted the One Big Beautiful Bill Act, a comprehensive tax and spending package that introduces significant changes to employee benefit plans. Key provisions include adjustments to health savings account eligibility, updates to telehealth services, modifications to dependent care assistance limits, and other fringe benefits. The changes to telehealth services will take effect in 2025, while the remaining changes will start in 2026. Here's a recap.
New investment options, "Shiny New Objects" (SNO), are on the rise along with marketing campaigns promoting their potential for high returns and low risk. With the removal of certain regulatory restrictions on private equity, bitcoins, and alternative investments, fiduciaries may feel encouraged to explore these options. While investing personal funds in these SNOs may be acceptable, it becomes problematic when managing an investment portfolio that must adhere to a fiduciary standard of care.
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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.
