The Rosenbaum Law Firm P.C. Blog

Plan providers love to blame fees when a client walks out the door. It’s convenient, it’s easy, and most importantly, it avoids looking in the mirror. But in my experience, fees are rarely the real reason your best clients leave. Silence is.

The best clients—the engaged plan sponsors, the ones who actually care—don’t leave after one mistake. They leave after a pattern. A missed email here. A delayed response there. A question about forfeitures or eligibility that gets answered two weeks later with something that feels copied and pasted. What you don’t realize is that they’re keeping score.

And here’s the problem: they don’t complain. The worst clients complain. The best ones observe. They notice when you stop bringing ideas. They notice when meetings become routine instead of meaningful. They notice when you stop acting like a partner and start acting like a vendor.

By the time you get the termination notice, the decision was made months ago.

Good providers understand that retention isn’t about reacting—it’s about anticipation. It’s about asking questions before the client realizes there’s an issue. It’s about showing up with solutions to problems the client didn’t know they had. It’s about making the plan sponsor feel like you’re paying attention, because most providers aren’t.

If you think your service model is “fine,” that’s probably your biggest problem. Nobody leaves “fine” for worse. They leave “fine” for better.

And somewhere out there is a provider who decided your client deserved better attention than you were giving them.

Forfeitures are one of those things in a 401(k) plan that everyone thinks they understand—until they don’t. It’s a small line item, often buried in reports, but it has a way of creating outsized problems when it’s ignored.

Most providers treat forfeitures like an administrative afterthought. They sit there, they accumulate, and eventually someone decides what to do with them. Reduce employer contributions, pay plan expenses, maybe allocate them. Simple enough, right? Except it isn’t.

The issue isn’t what forfeitures are—it’s how they’re used and when. I’ve seen plans carry large forfeiture balances for years with no clear policy. I’ve seen inconsistent application from year to year. I’ve seen providers who don’t raise the issue at all unless the auditor does. That’s not administration—that’s negligence dressed up as routine.

From a fiduciary standpoint, inconsistency is where the trouble begins. If the plan document allows multiple uses, that doesn’t mean anything goes. There needs to be a process, a rationale, and documentation to support it. Otherwise, you’re opening the door to questions you don’t want to answer.

Good providers don’t wait for forfeitures to become a problem. They track them, they communicate about them, and they push plan sponsors to make decisions in real time—not three years later when the number gets uncomfortable.

It’s not a complicated issue. But like most problems in this space, it becomes complicated the moment you stop paying attention.

There’s a mindset in the 401(k) industry that if the phone isn’t ringing, everything must be fine. No complaints, no issues, no fires to put out—so why bother the client?

That thinking is exactly how providers lose business.

“No news is good news” doesn’t exist in this space. What actually exists is disengagement. When a plan sponsor stops reaching out, it doesn’t mean they’re happy. It usually means they’ve stopped expecting anything from you.

And once expectations drop, it’s only a matter of time before someone else steps in and raises them.

The providers who win understand that communication isn’t about responding—it’s about initiating. They’re not waiting for the annual review to talk about the plan. They’re checking in when something changes. They’re flagging issues before they become problems. They’re bringing ideas that make the sponsor feel like the plan is moving forward, not standing still.

The providers who lose are the ones who confuse stability with satisfaction. They think consistency is enough. It’s not. Consistency without engagement just feels like indifference.

What plan sponsors want isn’t constant noise—they want relevance. They want to know that someone is paying attention to their plan the same way they are. And when they don’t feel that, they start looking elsewhere, quietly.

By the time you realize there’s an issue, you’re already behind.

Because in this business, no news isn’t good news. It’s just the beginning of the end.

Most plan sponsors I talk to don’t think their 401(k) plan is broken. Contributions are going in, participants have investment options, and nobody is banging down the door with complaints. On the surface, everything looks fine.

That’s the problem.

“Fine” is the most dangerous word in this business. Fine means nobody is asking questions. Fine means the plan hasn’t been stress-tested. Fine means you’re assuming that because nothing has gone wrong yet, nothing will.

But retirement plans don’t usually fail in obvious ways. They underperform quietly. Fees may be reasonable, but not competitive. Investment menus may be adequate, but not optimized. Participant engagement may exist, but not in a way that actually changes outcomes. None of these issues show up as emergencies—but they matter over time.

The gap between a “fine” plan and a well-run plan isn’t cosmetic. It’s measurable. It’s the difference between participants retiring on track versus falling short. It’s the difference between a sponsor who is managing a fiduciary process versus one who is just maintaining a system.

And here’s the uncomfortable truth: most plans sit in that middle ground.

They’re not disasters. They’re just not as good as they could be.

The issue isn’t that sponsors don’t care. It’s that they rely too heavily on the assumption that their provider, advisor, or recordkeeper is handling everything. Sometimes they are. Sometimes they’re not. And unless you’re asking the right questions, you won’t know the difference.

A good plan doesn’t happen by accident. It requires attention, evaluation, and a willingness to challenge the status quo.

Because in the 401(k) world, the biggest risk isn’t having a bad plan.

It’s having a plan that looks good enough to avoid scrutiny.

Every year, the 401(k) Averages Book comes out and tells us something we already know—but somehow still manage to ignore.

Fees are going down.

That’s the headline everyone wants to celebrate. Investment costs continue to drop, recordkeeping is more competitive than ever, and overall plan expenses keep trending downward. On paper, it looks like progress. It looks like the system is working.

And to a certain extent, it is.

But then you get past the headline, and that’s where things get uncomfortable.

Because while fees are falling overall, the disparities between what plans actually pay are still staggering. You can line up two plans of similar size, similar demographics, even similar providers—and still see meaningful differences in cost. Not a few basis points here or there, but gaps that actually matter over time.

So the real question isn’t whether fees are improving.

It’s why the gap still exists at all.

This isn’t 2005. We’re not operating in the dark anymore. Fee disclosures exist. Benchmarking tools are everywhere. Advisors talk about fiduciary duty like it’s second nature. Litigation has made it painfully clear that excessive fees are not just a theoretical issue.

And yet, here we are.

The problem isn’t a lack of information. It’s a lack of urgency.

Plans stay where they are because things feel “fine.” Providers don’t push hard enough because stability is easier than change. Advisors sometimes accept the status quo because proving something better requires effort, and effort creates friction.

Meanwhile, participants quietly pay the price.

Because here’s the part that gets lost: averages don’t apply to individuals. Just because the industry average is going down doesn’t mean your plan is benefiting from it. Someone is still paying more than they should—and often they don’t even realize it.

That’s what the Averages Book really exposes.

Not just progress, but inconsistency. Not just improvement, but complacency.

And if you’re not actively questioning what you’re paying and why, there’s a very real chance you’re on the wrong side of that gap.

One of the most common things plan sponsors say is, “We don’t get any complaints about our 401(k).”

It sounds like a good thing. It’s not.

In most cases, no complaints doesn’t mean satisfaction. It means silence. And silence in a retirement plan is usually a sign of disengagement, not success.

Think about how participants interact with their 401(k). Most enroll once, pick a contribution rate—often too low—and then forget about it. They don’t review investments regularly. They don’t read notices. They don’t reach out with questions unless something goes wrong.

So of course there are no complaints. There’s very little interaction.

That doesn’t mean the plan is working the way it should.

A successful plan isn’t one that avoids complaints. It’s one that drives better outcomes. Are participants saving enough? Are they increasing contributions over time? Are they making informed investment decisions? Those are the questions that matter, and they’re not answered by silence.

In fact, a lack of feedback should make sponsors more curious, not less. If nobody is engaging with the plan, that’s an issue worth addressing. It may mean communication isn’t effective. It may mean the plan design isn’t encouraging better behavior. Or it may simply mean participants don’t feel connected to something that has a significant impact on their future.

Good sponsors don’t measure success by the absence of noise.

They measure it by the presence of progress.

Because in the 401(k) world, no complaints doesn’t mean everything is fine.

It usually means nobody is paying attention.

Every year, plan sponsors sit through the annual 401(k) review. There’s a deck. There are charts. Investment performance gets discussed. Fees get mentioned. Everyone nods, a few questions get asked, and then the meeting ends.

And nothing changes.

If that sounds familiar, your annual review isn’t doing what it’s supposed to do.

The purpose of a plan review isn’t to present information—it’s to make decisions. Yet most reviews are structured like a recap instead of a working session. You’re being told what already happened, not what needs to happen next.

It becomes an exercise in checking boxes. Yes, investments were reviewed. Yes, fees were discussed. Yes, fiduciary duty was acknowledged. But if no actual changes come out of the meeting, what did you really accomplish?

A meaningful review should feel a little uncomfortable. It should raise questions about whether your current provider is still the right fit. It should challenge whether your investment lineup still makes sense. It should force a discussion about participant outcomes—not just plan features.

If your review ends without at least one actionable decision, it wasn’t a review. It was a presentation.

Sponsors need to start treating these meetings differently. Ask harder questions. Push for comparisons, not just summaries. Demand recommendations, not just reporting. And most importantly, expect that something—anything—should improve as a result of the conversation.

Because the risk isn’t that you’re having annual reviews.

The risk is thinking that having them means you’re actually managing your plan.

Walk into most 401(k) plans and you’ll see the same thing: a bloated investment lineup filled with options that all start to look the same after a while. Large cap blend A, large cap blend B, large cap blend C—different names, same story. Somewhere along the way, more became confused with better.

It’s not.

Most investment lineups are just noise. They create the illusion of choice without delivering meaningful differentiation. And for participants, especially those who aren’t financially sophisticated, that noise becomes paralysis. Too many options don’t empower people—they overwhelm them.

From a fiduciary perspective, this is where things get interesting. Plan sponsors think they’re doing the right thing by offering a wide range of investments. But if participants can’t reasonably navigate those choices, what’s the real benefit? A lineup should be constructed with intention, not excess.

The best plans I see are disciplined. A core menu that covers the essentials. A well-constructed target date fund series as the QDIA. Maybe a brokerage window for those who truly want more control. That’s it. Clean, understandable, and effective.

Providers sometimes push larger lineups because it feels safer—more options, less second-guessing. But in reality, fewer, better choices lead to better participant outcomes and a stronger fiduciary story.

Because a 401(k) plan isn’t a buffet. It’s not about offering everything. It’s about offering the right things—and making sure participants can actually use them.

My wife loves Le Creuset, which means, by extension, so do I. I’ve been to enough factory-to-table sales across the country to know one thing: for every cooking need, they’ll happily sell you three different versions of the same product. Bread oven, Dutch oven, braiser—at some point, it’s all just cast iron doing roughly the same job. Beautiful, yes. Necessary? Not always.

That’s the 401(k) industry in a nutshell.

Plan providers have become masters at packaging “nice to have” features as if they’re essential. Managed accounts layered on top of target date funds. Financial wellness tools nobody uses. Proprietary analytics dashboards that look impressive but don’t change a single fiduciary outcome. It’s not that these things are inherently bad—it’s that they’re often sold without regard to whether the plan sponsor actually needs them.

And here’s the problem: unnecessary complexity isn’t harmless. Every added feature introduces cost, confusion, and sometimes even fiduciary risk. Sponsors don’t need ten moving parts—they need a plan that works, is easy to understand, and keeps them compliant.

The best providers I’ve worked with don’t lead with bells and whistles. They lead with questions. What are you trying to solve? Where are the risks? What actually matters to your employees?

Because at the end of the day, a great 401(k) plan isn’t about how much you can include—it’s about how much you can strip away and still deliver strong outcomes.

Sometimes the best thing you can sell a plan sponsor is less.

Let’s not overcomplicate it. A federal court wiped out the 2024 Retirement Security Rule, and the Department of Labor responded the only way it really could—by reverting to the old five-part fiduciary test. That’s not reform. That’s not progress. That’s hitting rewind and pretending the last few years were just a bad sequel nobody wants to talk about.

What Actually Happened (Without the Nonsense)

Here’s the clean version you can explain without needing a whiteboard. The DOL tried to expand fiduciary status, especially to capture one-time advice like rollovers and annuity recommendations. The courts looked at that and said the agency overreached. Not a little—fundamentally. Instead of continuing the fight, the DOL stepped back, and with that, the rule collapsed. We are now back to the same framework that has governed this space for decades.

The core issue was simple. The DOL tried to stretch fiduciary status beyond ongoing advisory relationships and into transactional sales conversations. The courts weren’t buying it. They made it clear that without a real, continuing relationship of trust and reliance, you don’t get to call someone a fiduciary just because money is changing hands.

The Five-Part Test: The Cockroach That Won’t Die

The five-part test survives again, and at this point, it feels indestructible. Advice must be given for a fee, on a regular basis, under a mutual understanding that it will serve as a primary basis for decisions, and it must be individualized. Miss one element and fiduciary status falls apart.

That’s why rollover advice has always been so slippery. It’s often a one-time interaction, not part of an ongoing advisory relationship, and that distinction matters. The DOL has tried repeatedly to blur that line. The courts keep drawing it right back.

My Take: This Was Always Going to Happen

Let me be blunt. This outcome was predictable. The DOL keeps trying to solve a problem that really requires Congress to act, not regulators trying to reinterpret a statute written for a different era. Each time they push too far, the courts step in and remind them where the boundaries are.

We’ve seen this movie before. Different rule, same ending. At some point, it stops being about poor drafting and starts being about the limits of what ERISA actually allows. You can’t retrofit a 1970s law to fully regulate a modern rollover-driven retirement system without running into legal walls.

The Real Issue Nobody Wants to Say Out Loud

This debate gets dressed up as participant protection, but let’s not kid ourselves. This is about money, specifically rollover money. That’s where the battles are being fought, and that’s where the incentives collide. The insurance side wants flexibility. Broker-dealers want to operate under Regulation Best Interest. RIAs want a broader fiduciary standard. The DOL wants to expand its authority. The courts keep pushing back. Meanwhile, billions in retirement assets are moving every year, and everyone wants a piece of that flow. That’s why this issue never goes away. It’s not philosophical. It’s economic.

What This Means for You

From a practical standpoint, we’re back to where we were. The compliance framework doesn’t suddenly change. The five-part test governs. PTE 2020-02 remains part of the landscape. Advisors still operate in a world where fiduciary status depends on facts and circumstances rather than bright-line rules. Rollovers remain the gray area they’ve always been. Some advisors will structure their practices to avoid fiduciary status. Others will embrace it. Either way, the lack of clarity isn’t going anywhere.

The Ary Rosenbaum Bottom Line

This isn’t a win for one side or a loss for another. It’s a reminder of the structural problem. ERISA was designed for ongoing retirement plan relationships, not for a marketplace dominated by rollovers, IRAs, and one-time advice interactions. Until Congress steps in and rewrites the rules for the modern retirement system, regulators will keep trying to stretch the existing framework, and courts will keep pulling it back. And every few years, we’ll get another headline, another rule, and another reversal. Different day. Same result.