The Rosenbaum Law Firm P.C. Blog

Plan sponsors love a good illusion. And the biggest one in the 401(k) world is this: if the recordkeeper is doing a lot, they must be responsible for a lot. They’re not.

Recordkeepers are service providers. Very important ones. They handle transactions, participant accounts, websites, statements, and enough moving parts to make your head spin. But none of that makes them a fiduciary—at least not in the way that matters when things go sideways.

The problem is they don’t always look like vendors. They present investments. They show up to committee meetings. They hand you reports with charts and colors that scream “we’ve got this covered.” Over time, it’s easy for a plan sponsor to mentally outsource responsibility. That’s where the trouble starts.

Because when there’s a bad fund lineup, excessive fees, or a participant lawsuit, the recordkeeper isn’t the one in the hot seat. You are.

Unless you’ve formally hired a discretionary fiduciary—like a 3(38) investment manager—the decisions are still yours. Even if the recordkeeper “recommended” the funds. Even if they built the lineup. Even if they said, “this is what most plans do.” None of that transfers liability.

This isn’t about distrust. Most recordkeepers are trying to be helpful. But helpful isn’t the same as accountable. And confusing the two is how sponsors get burned.

A good process fixes this. Know who your fiduciaries are. Define roles clearly. Document decisions. Ask uncomfortable questions. And if you want someone else to take discretion, hire them properly.

Because in the end, when the music stops, the recordkeeper packs up their materials and goes home. The fiduciary? That’s still you.

Every now and then, the industry rolls out a headline that sounds like it belongs in a late-night infomercial. “Boost your retirement income by 30%.” No extra savings. No extra work. Just one simple tweak.

This time, the hook comes from findings highlighted by TIAA—suggesting that retirees who manage withdrawals themselves, instead of locking into more structured income approaches, can generate meaningfully higher income. On paper, the math works.

But let’s slow down for a second.

Yes, if you change how you withdraw money—timing distributions, taking on more market exposure, maybe spending a little more early—you can increase income in the short term. That’s not innovation. That’s pulling dollars forward.

And when you pull dollars forward, you’re usually pulling risk forward too.

This isn’t free money. It’s borrowed comfort.

Because retirement isn’t about winning in year one. It’s about not losing in year twenty. And that’s where these “boost your income” strategies start to crack. They rely on discipline. They rely on markets cooperating. They rely on participants behaving rationally when things get rocky.

That’s a tough bet.

We all know how participants actually behave. They chase returns when things are good. They panic when things are bad. They sell low and regret it later. Giving them a “do-it-yourself income strategy” and expecting consistent execution is wishful thinking.

The TIAA findings are interesting. But they’re based on models, not emotions.

Plan sponsors shouldn’t be chasing optimization headlines. They should be building systems that survive real-world behavior. Managed accounts. Thoughtful income defaults. Guardrails that protect participants from themselves.

Because retirement income isn’t about squeezing out an extra 30%.

It’s about making sure the money is still there when it actually matters.

Plan sponsors love to say participants don’t engage. They don’t enroll, don’t increase deferrals, don’t rebalance. The conclusion? Participants are lazy.

No, they’re not.

They’re human.

And humans are wired for inertia. We avoid decisions, delay action, and stick with defaults. That’s not a character flaw—that’s behavioral finance 101. The real problem isn’t participant behavior. It’s plan design that pretends behavior doesn’t exist.

If your plan requires employees to opt in, choose a deferral rate, pick investments, and remember to increase contributions over time, you’ve built a system that depends on perfect behavior. That system will fail. Not occasionally—consistently.

Voluntary systems sound good in theory. Freedom of choice, personal responsibility, all the right buzzwords. In practice, they underperform because they ask too much of people who are busy, distracted, and often financially stressed.

Now look at what works.

Automatic enrollment drives participation. Automatic escalation increases savings rates. Default investments—done right—create reasonable outcomes without requiring constant decision-making. These aren’t bells and whistles. They’re the foundation of a functioning plan.

The data has been clear for years: when you remove friction and make the right decision the easy decision, outcomes improve. Not because participants suddenly got smarter, but because the system stopped working against them.

And yet, too many plans still operate like it’s 1995—optional enrollment, low default rates, minimal escalation. Then sponsors wonder why participation lags and balances fall short.

Here’s the uncomfortable truth: if your plan isn’t producing good outcomes, it’s not because your employees failed. It’s because your design did.

Bottom line

Participants aren’t lazy. Your plan is just too optional. Fix the design, and the behavior follows.

There are phrases in the retirement plan business that should set off alarms. Not the obvious ones—those usually get handled. It’s the quiet, casual ones that do the real damage. And none is more dangerous than this: “We’ll fix it later.”

It sounds harmless. Responsible, even. A temporary delay. A mental sticky note. But in the ERISA world, “later” is where problems go to grow teeth.

Because retirement plan mistakes don’t sit still. They compound.

The Lie We Tell Ourselves

No one intends to create a failure. Late deposits happen because payroll is tight or someone is out of the office. Notices get delayed because HR is juggling ten other priorities. Operational errors slip through because the system “usually works.”

And the response is always the same: we’ll fix it.

Later.

That word—later—is where the cost begins. Because later doesn’t freeze the problem. It magnifies it. Late contributions aren’t just late—they’re prohibited transactions. Missed notices aren’t just administrative—they’re compliance failures. Operational errors don’t just sit there—they affect participants in real time.

You’re not pausing the issue. You’re letting it age.

The Compounding Effect of Delay

A late deposit today becomes lost earnings tomorrow. Wait long enough, and now you’re calculating corrections, documenting decisions, possibly explaining yourself to regulators. What could have been a small operational fix becomes a fiduciary narrative.

And narratives are what get written up.

The same goes for notices. Miss an EACA notice timing requirement and you’re not just sending it late—you’re dealing with whether your entire safe harbor structure is compromised. Now you’re not fixing a notice. You’re fixing a plan design issue.

All because of “later.”

The Hard Truth: Time Is Not Neutral

We like to think time gives us flexibility. In this business, time is usually working against you. The longer something sits unresolved, the fewer clean options you have.

Early fixes are operational. Late fixes are legal.

That’s a big difference.

A Parallel Nobody Likes—but Everyone Understands

It reminds me of someone who discovers a serious health issue and decides to “take some time” before dealing with it. You can understand the instinct—avoidance, hope, denial—but you also know how that story tends to end.

Retirement plan issues work the same way. The earlier you act, the more options you have. The longer you wait, the fewer—and more painful—those options become.

This isn’t about fear. It’s about reality.

Why This Keeps Happening

Because most plan sponsors don’t have a process problem—they have a prioritization problem. The plan is important, but it’s rarely urgent. Until it is.

And by the time it feels urgent, it’s already escalated.

“We’ll fix it later” is usually code for “this isn’t urgent enough right now.” The problem is that ERISA doesn’t grade on urgency. It grades on compliance.

Process Is the Antidote

The only way to eliminate “later” is to replace it with structure.

Clear timelines for deposits, with accountability. A compliance calendar that isn’t just created, but followed. Defined ownership of notices and filings. Regular reviews that catch issues before they compound.

Not glamorous. Not exciting. But effective.

Because good process doesn’t rely on memory, intention, or good luck. It creates consistency.

The Role of Your Providers

Advisors, TPAs, payroll providers—they should be part of the solution, not silent observers. If something is late or off, the right provider raises the issue immediately, even if it’s uncomfortable.

Because uncomfortable early is a lot better than expensive later.

If your team isn’t pushing you on timing and compliance, they’re not protecting you—they’re enabling delay.

The Ary Rule: Fix It Now or Pay for It Later

There are only two paths when something goes wrong in a retirement plan: fix it now, or pay for it later.

“Later” is always more expensive. More complicated. More visible.

And once it becomes visible, it’s no longer just your problem.

Bottom Line

“We’ll fix it later” isn’t a plan. It’s a warning sign.

In the retirement plan business, small delays don’t stay small. They grow, they compound, and eventually, they demand attention on their own terms.

The sponsors who avoid problems aren’t the ones who never make mistakes. They’re the ones who don’t give those mistakes time to become something bigger.

Because in this business, timing isn’t just important.

It’s everything.

You just described one of the most underrated killers of otherwise good ideas: bad timing.

That autograph show didn’t suddenly become worse. Same vendors, same celebrities, same concept. What changed? The calendar. And the calendar is undefeated.

Running on Good Friday weekend, bleeding into Easter? That’s not just a scheduling choice—that’s a self-inflicted wound. People are traveling, with family, distracted, or just not in the mindset to go to a show. You didn’t lose customers—you made it impossible for them to show up.

And that brewery running a 1986 New York Mets reunion on Yom Kippur? That’s not bad luck. That’s malpractice.

The Illusion That “If It’s Good, They’ll Come”

This is the biggest lie in events—and frankly, in the retirement plan space too.

“If the content is strong, people will attend.” No, they won’t. Not if it conflicts with religious observance, major holidays, school breaks, or even competing industry events.

You’re not competing just with other conferences. You’re competing with life.

And life always wins.

Plan Sponsors Are No Different

You want plan sponsors at your event? Then respect their calendar the way you respect ERISA deadlines.

Avoid religious holidays. Avoid long weekends. Avoid major industry conflicts. Avoid quarter-end chaos. Because if you don’t, you’re not testing your content—you’re testing their availability.

And availability is binary. They’re either there or they’re not.

The Ary Rule: Don’t Fight the Calendar—It Will Crush You

You can outwork competitors. You can out-market them. You can out-think them.

You cannot out-schedule the calendar.

The smartest event planners don’t just pick a date—they eliminate bad ones first. They treat the calendar like a minefield, not a checklist.

Bottom Line

Great idea, wrong date = empty room. Average idea, perfect date = full house.

Timing doesn’t enhance success. It determines whether success is even possible.

There’s truth in what you’re saying, but let’s not turn it into a fairy tale.

Yes, talent in the retirement plan business tends to surface. It’s too small a world, too relationship-driven, too reputation-based for real ability to stay hidden forever. If you know your stuff—really know it—people talk. Opportunities eventually find you. That part is real.

But here’s the part people don’t like to admit: talent doesn’t rise in a straight line. It gets stuck. It gets ignored. It gets buried under bad management, politics, and inertia.

There are plenty of sharp people sitting in the wrong seat, at the wrong firm, with the wrong leadership, wondering why no one notices. Not because they lack ability—but because they lack oxygen.

The Fakakta Firm Problem

Every industry has them. The places where good ideas go to die. Where hierarchy matters more than insight. Where being “safe” beats being right.

You stay too long in a place like that, and one of two things happens: either you get out, or you get quiet.

And once you get quiet, talent doesn’t rise—it settles.

That’s why your line hits: if you were still there, no one would be reading this. Not because you didn’t have the talent then, but because you didn’t have the platform.

Talent Needs a Trigger

Talent rising isn’t automatic—it needs a moment. A break. A risk. Sometimes even a little dissatisfaction.

Leaving the wrong environment, starting something new, putting your voice out there—that’s usually what flips the switch. Not the talent itself, but the decision to stop hiding it.

The Ary Rule: Talent Finds Light—If You’re Willing to Move Toward It

If you’re good, really good, this business has a way of eventually rewarding that. But “eventually” can take a long time if you stay in the wrong place.

The people who break through aren’t always the most talented. They’re the ones who put themselves in positions where their talent can’t be ignored.

Bottom Line

Cream rises, sure. But sometimes you’ve got to tip the glass.

Because talent alone isn’t enough. You need the right environment, the right exposure, and sometimes the guts to leave the fakakta situation that’s keeping you invisible.

You can have the greatest idea in the retirement plan space—brilliant plan design, elegant auto features, some next-level decumulation strategy that actually solves a real problem—and it doesn’t matter if it lives in a vacuum.

Because this business isn’t just about being right. It’s about being seen.

I’ve seen too many smart people in this industry fall in love with their ideas like they’re writing the next great novel. They tweak it, refine it, polish it, and then… nothing. No distribution. No sales channel. No capital behind it. Just a great idea sitting on a shelf like a dusty law review article nobody reads.

Meanwhile, the ideas that win? They’re not always better. They’re just funded and distributed.

Distribution Is the Real Fiduciary Duty (No One Talks About)

You want to know what separates success from obscurity in this business? It’s not intelligence. It’s not innovation. It’s distribution.

Recordkeepers with scale. Advisors with relationships. Aggregators with reach. If you’re not plugged into one of those pipelines, you’re shouting into the void.

You can build the perfect retirement solution, but if no plan sponsor ever hears about it, it might as well not exist.

Money Isn’t Just Fuel—It’s Oxygen

And let’s talk about capital, because people dance around it like it’s impolite. It’s not.

Money buys time. Money buys talent. Money buys access. Most importantly, money buys the ability to survive long enough for your idea to catch on.

Without it, even the best ideas suffocate before they ever get a chance.

The Myth of “If It’s Good Enough, It Will Win”

That’s a nice story. It’s also nonsense.

Good ideas don’t automatically rise to the top. They need sponsors, champions, and platforms. They need people pushing them into the marketplace, not just believing in them.

Because in the retirement business, being right isn’t enough. You have to be present.

The Ary Rule: Innovation Without Distribution Is Just a Hobby

If you can’t get your idea in front of decision-makers—plan sponsors, advisors, consultants—it’s not a business. It’s a hobby.

And hobbies don’t change industries.

Bottom Line

You’re absolutely right. No money, no distribution, no impact.

In this business, the graveyard isn’t filled with bad ideas. It’s filled with great ones nobody ever saw.

You read enough U.S. Department of Labor / Employee Benefits Security Administration releases over the years and you start to realize something: the facts change, the villains rotate, but the plot is always the same—fiduciaries forget that this is not their money. This latest release is another reminder that ERISA is less “guidance” and more “gravity.” You can ignore it for a while, but eventually you hit the ground.

The Real Headline Isn’t the Case—It’s the Pattern

Whatever the specific enforcement hook was here—late contributions, misuse of plan assets, self-dealing, take your pick—the takeaway isn’t the violation. It’s the predictability. Every one of these cases follows the same arc: the plan sponsor treats the plan like a side account, internal controls get sloppy, service providers either miss it or look the other way, and then EBSA shows up already knowing the answer. The mistake isn’t what they did. The mistake is thinking they’d never get caught.

Fiduciary Process: The Thing Nobody Wants to Pay For (Until They Have To)

Plan sponsors love to spend money on investments, recordkeepers, and participant-facing tech. What they don’t want to spend money on is process. No one wakes up saying they need better fiduciary governance, but that’s exactly what separates the plans that end up in enforcement actions from the ones that don’t. When EBSA comes knocking, they’re not asking if your lineup looks good. They’re asking for documentation, decision-making authority, and rationale. If your answer is “we thought it made sense,” you’re already behind.

Service Providers Aren’t Off the Hook Either

These cases rarely happen in a vacuum. Advisors, TPAs, payroll providers—someone usually saw something and either didn’t understand it or didn’t want to rock the boat. Being agreeable doesn’t keep you out of trouble. It just means you’ll be included in the story when things go sideways.

The Ary Rule: If It Feels Like Your Money, You’re Already in Trouble

Plans fail when employers blur the psychological line. The second a sponsor starts thinking it’s their plan or their money, the problems begin. It’s not. You’re a fiduciary, not an owner. That distinction isn’t philosophical—it’s legal, and Employee Benefits Security Administration enforces it accordingly.

Bottom Line

This release isn’t surprising. It’s a reminder that enforcement doesn’t require new rules—just time and bad behavior. If you’re reading it thinking it couldn’t happen to you, that’s usually how it starts.

The Dayforce report (as covered by 401(k) Specialist) basically says this: after a few years of modest improvement, retirement savings took a step backward in 2025. Savings rates dipped from about 9.2% to 8.9%, participation ticked down, and more people tapped their accounts through loans. That’s the headline. The substance is more revealing—and more troubling.

People Didn’t Get Worse—They Got Squeezed

The article makes clear this isn’t about laziness or ignorance. It’s about pressure. More than one in four workers reduced contributions, and borrowing from plans increased, which tells you everything you need to know: people are using retirement plans as financial shock absorbers. When rent, food, and life get expensive, the 401(k) becomes the easiest place to “borrow from your future self.” And that’s exactly what’s happening.

The Middle Class Is Where the Damage Is

The real story isn’t the decline—it’s who is declining. The biggest pullback is among workers earning roughly $50,000 to $150,000. That’s your core workforce. Not the wealthy, not the struggling edge cases—the middle. When they start cutting back, it’s not a blip. It’s a signal. Meanwhile, disparities continue to widen: higher earners keep saving, while lower and middle-income workers fall behind. Gender and racial gaps persist, and in some cases worsen. Translation: the system is working exactly as designed—just not for everyone.

Progress Since 2022…Then a Stall

The data shows some improvement since 2022—higher savings rates, more contributions—but that progress has now stalled or reversed across key metrics like participation and loan usage. That matters. It means whatever momentum we thought we had wasn’t structural. It was conditional. And when conditions got tougher, behavior snapped back.

There Is One Bright Spot (Of Course There Is)

Gen Z is actually improving—higher participation, higher contributions, better engagement. Why? Because they’re being auto-enrolled into better-designed plans. Not because they suddenly became more disciplined than prior generations. That’s not optimism—that’s proof of concept.

The Quiet Subtext: This Is Now an Employer Problem

The article leans into something plan sponsors don’t love to hear: financial stress isn’t just personal anymore. It affects productivity, retention, and engagement. This isn’t just about retirement readiness. It’s a workforce issue.

Bottom Line (Ary Version)

This isn’t a reversal. It’s reality catching up. When people are financially strained, they save less, participate less, and borrow more. The real takeaway is simple: the system only works when people have the capacity to participate. When that capacity disappears, so does the progress.