The Rosenbaum Law Firm P.C. Blog

Most plan sponsors don’t wake up thinking, “Let’s mismanage the 401(k) today.” Yet bad outcomes happen all the time — excessive fees, underperforming investments, compliance failures, and, eventually, fiduciary exposure.

In my experience, the problem usually isn’t the plan. It’s the process.

A “bad” 401(k) is almost always the result of decisions made without structure, documentation, or follow-through. Committees meet irregularly. Reviews are rushed. Vendors are left on autopilot. Benchmarks are outdated or nonexistent. Changes happen reactively instead of strategically.

ERISA doesn’t require perfection. It requires prudence. And prudence is about how decisions are made, not whether every decision turns out to be optimal in hindsight.

Courts don’t ask whether your plan was the cheapest or the best performing. They ask whether you had a reasoned process: Did you review fees regularly? Did you monitor investments against stated criteria? Did you understand what your providers were doing — and what they weren’t? Did you document your deliberations?

Too many sponsors confuse delegation with abdication. Hiring a recordkeeper, advisor, or TPA does not transfer fiduciary responsibility. It simply changes how that responsibility must be exercised. Oversight is still required. Questions still need to be asked. Decisions still need to be made — and recorded.

A strong process doesn’t require endless meetings or excessive paperwork. It requires consistency. Clear roles. Defined review cycles. Written policies that are actually followed. And the discipline to revisit decisions before they become problems.

If your plan feels “stuck,” “messy,” or risky, don’t start by firing vendors or changing investments. Start by fixing the process.

Because a good process can rescue a mediocre plan. A bad process will eventually ruin a good one.

If I walked into your office tomorrow and you handed me responsibility for your 401(k), I wouldn’t start by changing investments, firing vendors, or chasing the latest industry trend.

I’d start with the basics — because that’s where most plans quietly fail.

First, I’d look at who actually makes decisions. Not who’s listed on paper, but who really has authority. Too many plans operate with informal power structures: one dominant personality, a “committee of one,” or a group that meets only when something goes wrong. Fiduciary responsibility doesn’t work well in the shadows.

Second, I’d review your process. Do you have an investment policy statement that’s followed, not just filed away? Are fees benchmarked on a regular schedule? Do you review vendors proactively or only after complaints arise? A plan without a process is a lawsuit waiting for a bad year.

Third, I’d read the meeting minutes — slowly. Minutes tell the real story. They show whether decisions were reasoned, whether alternatives were considered, and whether questions were asked. Sparse or generic minutes don’t protect anyone. They usually do the opposite.

Fourth, I’d assess vendor oversight. Recordkeepers, advisors, and TPAs are important, but none of them are fiduciaries just because they say they are. Delegation requires monitoring. Trust without verification is not a fiduciary strategy.

Finally, I’d look at participant impact. Not through glossy reports, but through outcomes. Are employees actually participating? Are they deferring enough? Are communications understood, or just delivered?

Here’s the truth plan sponsors don’t always want to hear: most 401(k) problems aren’t dramatic. They’re quiet. They build slowly through neglect, assumptions, and unchecked routines.

Fixing a plan doesn’t start with bold moves. It starts with discipline.

And discipline, done consistently, is what keeps good plans out of trouble.

For years, plan providers survived on a simple premise: do solid work, keep clients happy, and the business will come. That world doesn’t exist anymore.

Being “good at what you do” is now table stakes. Every recordkeeper claims strong technology. Every TPA promises accuracy. Every advisor says they’re service-driven. From a plan sponsor’s perspective, everyone sounds the same — and sameness is deadly in a commoditized market.

The uncomfortable truth is that competence no longer differentiates providers. Visibility does. Clarity does. Relevance does.

Plan sponsors don’t evaluate providers the way providers think they do. They aren’t auditing backend processes or marveling at operational efficiency. They’re asking simpler questions: Do I trust you? Do you understand my problems? Can you explain risk without confusing me?

Providers who struggle usually don’t struggle because they’re bad. They struggle because they’re invisible. They rely on referrals that no longer flow the way they used to. They depend on relationships that retire, merge, or get disrupted by consolidation. They assume their work speaks for itself — even though no one is listening.

In today’s environment, providers have to articulate value, not just deliver it. That means having a point of view. It means educating without lecturing. It means being willing to say uncomfortable things about fiduciary responsibility, governance, and process — even when it costs a sale.

The providers who will survive are the ones who stop hiding behind “service” and start owning their role as problem solvers and risk managers. They invest in messaging the same way they invest in systems. They show up consistently, not just when an RFP appears.

Being good still matters. It just isn’t enough.

In a crowded industry, providers who don’t define themselves will be defined by price — or ignored entirely.

Every plan sponsor committee has one.

The loudest person in the room. The one with the strongest opinions. The one who “has experience” — usually from a prior employer, a cousin’s plan, or something they once read on LinkedIn.

And far too often, that person is also the least informed about how fiduciary responsibility actually works.

ERISA does not reward confidence. It rewards prudence. Courts don’t care who spoke the most, who dominated the meeting, or who shut everyone else down. They care about whether decisions were made through a reasoned, informed process. Volume is not a substitute for diligence.

The danger isn’t that committee members disagree. Disagreement is healthy. The danger is when one voice crowds out inquiry. When questions stop being asked because “we’ve always done it this way.” When vendors aren’t challenged because someone insists they’re “fine.” When the committee defers to confidence instead of evidence.

Fiduciary decisions should be built on data, benchmarking, expert input, and documented deliberation. That means asking uncomfortable questions. It means slowing down decisions that feel rushed. It means being willing to say, “I don’t know — let’s find out.”

Plan sponsors also need to remember this: fiduciary liability is individual. Being outvoted doesn’t protect you if you sat silently while bad decisions were made. Silence can look a lot like agreement when minutes are reviewed years later.

Strong committees don’t eliminate dominant personalities. They manage them. A good chair keeps meetings structured, ensures every member is heard, and forces decisions back to process, not personalities. Advisors and ERISA counsel should be facilitators, not spectators.

The goal isn’t harmony. The goal is governance.

Because when the loudest voice is wrong, and no one challenges it, the fiduciary risk belongs to everyone in the room.

Every year brings incremental changes to retirement plans, but 2026 is different. This isn’t just about higher contribution limits. It’s about a fundamental shift in how catch-up contributions are taxed — one that will directly affect higher-income workers and quietly reshape retirement planning.

Start with the headline numbers. In 2026, the employee 401(k) contribution limit rises to $24,500. Catch-up contributions for those age 50 and older increase to $8,000, and participants ages 60 to 63 can still make a larger “special” catch-up of $11,250. On paper, that’s a win for retirement savers.

But here’s the catch — and it’s a big one.

If you earned more than $145,000 in the prior year, all catch-up contributions must be made on a Roth basis. No pre-tax option. No deferral of income taxes until retirement. That’s a significant departure from how higher earners have historically used catch-ups as part of their tax-planning strategy.

This change isn’t accidental. Shifting catch-up contributions to Roth means the government collects taxes now instead of later. For participants in their peak earning years, that can mean paying tax at a higher marginal rate than they might have faced in retirement.

That said, this isn’t automatically bad policy — just different policy.

Roth contributions grow tax-free, qualified withdrawals aren’t taxed, and Roth accounts aren’t subject to required minimum distributions. For some participants, especially those who expect higher taxes later or want flexibility in retirement income planning, this could actually be a long-term advantage.

The real risk is complacency.

Participants need to confirm whether their employer’s plan even offers a Roth option. If it doesn’t, higher-income employees may lose the ability to make catch-up contributions altogether. Plan sponsors need to understand that this is no longer a participant-level issue — it’s a plan-design and operational issue.

2026 isn’t just another compliance year. It’s the year retirement savings became more complicated — and more strategic.

If you’re not reviewing this now, you’re already late.

At some point, without much notice, 401kHelpCenter.com disappeared.

No announcement. No farewell post. No “we’re shutting down” explanation. One day it was there — the next day it wasn’t. And that’s a shame, because it was one of the best collectors of 401(k) content the industry ever had.

For years, 401kHelpCenter wasn’t flashy. It wasn’t trying to sell you a platform, a managed account, or a bundled solution. It did something far more valuable: it curated. It gathered articles, regulatory updates, commentary, and resources from across the retirement industry and put them in one place. It respected the idea that good information mattered, and that practitioners — plan sponsors, providers, and advisors — wanted access to it without marketing noise.

In an industry that now confuses content with branding and education with lead generation, 401kHelpCenter felt almost old-fashioned. It didn’t pretend to be the smartest voice in the room. It let everyone be heard.

Its disappearance says something uncomfortable about where we are as an industry. Content has become transactional. If it doesn’t convert, it doesn’t survive. If it doesn’t fit neatly into a funnel, it gets abandoned. The idea of maintaining a neutral, centralized library of retirement plan knowledge doesn’t generate enough ROI to justify the effort — even if it creates enormous value.

That’s the real loss.

401kHelpCenter wasn’t perfect, but it was useful. It helped newcomers learn the landscape and veterans keep up with it. It reminded us that the retirement industry is bigger than any one firm, platform, or personality.

When a site like that goes dark, knowledge doesn’t disappear — it fragments. It gets buried behind paywalls, gated downloads, and SEO-driven blog posts that say less and sell more.

That’s progress, I guess.

But it still feels like something important was lost.

When a retirement plan error surfaces, the first reaction is almost always the same: finger-pointing. The sponsor looks to the advisor. The advisor looks to the TPA. The TPA looks to the recordkeeper. And somewhere in the background, everyone is quietly hoping the problem just goes away.

It rarely does.

From a provider perspective, the most dangerous assumption is that responsibility will naturally land where it “belongs.” ERISA doesn’t work that way. Responsibility is determined by facts, conduct, and documentation—not by job titles or marketing labels.

Late deposits, eligibility failures, forfeiture misapplications, and missed amendments usually don’t happen because one party acted maliciously. They happen because everyone assumed someone else was handling it. Providers often discover too late that they were copied on enough emails, answered enough questions, or “helped out” just enough to be pulled into the mess.

What sponsors want is clarity. What providers need are boundaries. Engagement agreements, service matrices, and onboarding documentation matter far more than most providers admit. Courts and regulators look at what you actually did, not what your contract said you didn’t do.

The uncomfortable truth is that providers who pride themselves on being “full service” often create their own exposure. Helping is fine. Owning the problem—intentionally or not—is not.

Providers who survive these situations best aren’t the loudest defenders. They’re the ones who can calmly point to contemporaneous documentation and say, “Here’s what we did—and here’s what we didn’t.”

Most plan sponsors genuinely want to do the right thing. They offer a retirement plan because they care about employees, want to help people save, and believe they are acting responsibly. That instinct is admirable—but under ERISA, it is not a defense.

Fiduciary responsibility is not measured by intent. It is measured by process.

Courts and regulators don’t ask whether an employer meant well. They ask whether the sponsor followed the plan document, monitored providers, corrected errors, and made informed decisions based on available information. A sponsor can act in complete good faith and still violate fiduciary duties by failing to follow through on those obligations.

This disconnect surprises many employers. They remember approving improvements, responding to employee questions, and trusting experienced providers. What they don’t always realize is that ERISA looks backward and objectively. Good intentions don’t excuse missed deposits. Caring about employees doesn’t cure an eligibility failure. Trusting a provider doesn’t eliminate the duty to monitor.

That doesn’t mean sponsors need to become paranoid or adversarial. It means they need to be disciplined.

Strong fiduciary practices are not complicated, but they are deliberate. Documenting decisions. Asking follow-up questions. Keeping meeting notes. Confirming who is responsible for what. Addressing problems when they first appear instead of hoping they resolve themselves.

Ironically, the sponsors who are best protected are often the ones who slow down. They don’t rush decisions to appear decisive. They don’t accept verbal assurances without written confirmation. They treat the retirement plan as an ongoing governance responsibility—not a benefit that runs itself.

Being a good employer matters. It just isn’t enough.

Good employers build trust with employees. Good fiduciaries build a record that survives scrutiny.

The strongest plan sponsors understand they must do both.

Providers often believe that being helpful will protect them if something goes wrong. It feels intuitive: strong relationships, responsive service, and goodwill should count for something.

In ERISA litigation, they usually don’t.

Courts don’t evaluate intent, tone, or effort. They evaluate actions, authority, and outcomes. A provider can be attentive, kind, and well-liked—and still end up in trouble if their conduct crossed a fiduciary or operational line.

What matters is not whether you tried to help, but whether you exercised discretion, gave advice, or assumed responsibility. A friendly phone call doesn’t outweigh a poorly documented decision. Years of good service don’t erase a single compliance failure.

This disconnect surprises many providers. They remember the late nights, the extra help, and the problem-solving. Plaintiffs’ lawyers remember emails, processes, and missed safeguards.

The lesson isn’t to stop providing good service. It’s to stop assuming good service is a defense. Documentation, role clarity, and process discipline matter more than goodwill when things turn adversarial.

Providers who understand this early don’t become cynical—they become careful. They serve clients well while protecting themselves through clear communication and written records.

Good service builds relationships. Good documentation survives litigation.

There is no denying it: sponsors are tired. SECURE 2.0 arrived in waves, and many employers are overwhelmed by rules that seem half-finished, delayed, or constantly “to be determined.”

That fatigue is understandable. For providers, though, it’s dangerous.

The temptation is to reassure sponsors with phrases like “we’ll deal with that later” or “the IRS will clarify.” Unfortunately, fatigue does not excuse noncompliance, and regulators are not sympathetic to exhaustion. Catch-up contribution changes, Roth requirements, and age-based rules aren’t theoretical—they’re operational realities that are already affecting payroll systems and plan administration.

Providers who oversimplify SECURE 2.0 to keep sponsors calm may be setting themselves up for future blame. When something goes wrong in 2026 or beyond, the question won’t be how confusing the rules were. It will be what advice was given and whether risks were clearly explained.

The better approach is honesty. Sponsors don’t need perfection—they need transparency. Telling a client, “This area is unsettled, and here are the risks of waiting,” is far safer than projecting confidence that isn’t warranted.

Providers add real value by managing expectations, not eliminating anxiety. Sometimes the most responsible answer is, “This is messy, and here’s how we’re going to navigate it together.”

That may not feel like salesmanship. It is, however, good risk management.