The Rosenbaum Law Firm P.C. Blog

About 20 years ago, there was a medical report claiming that dental plaque could cause heart disease. Now, the cynic in me can’t help but wonder if that was cooked up by the dental lobby as a way to generate more patient visits. Let’s face it—fluoridated water and improved dental hygiene probably didn’t help the average dentist’s bottom line. But cynicism aside, good oral health is a legitimate goal.

Some people only see the dentist when their mouth is screaming in pain. Others go twice a year for checkups and cleanings to avoid the bigger problems—root canals, caps, and dentures. Preventative care is common sense.

As an ERISA attorney, I’ve started to see myself as the retirement plan version of a dentist. Some plan sponsors only come to me when something’s gone horribly wrong—like a missed restatement, late deferrals, or a full-blown DOL audit. But there are others, thankfully, who understand that seeing ERISA counsel is part of a healthy, preventative routine.

Part of the core messaging in my practice has always been this: plan sponsors should be reviewing their retirement plans annually. Not just to check a box, but to ensure proper plan operation, confirm fees are still reasonable, and verify that fiduciary processes are in good shape. That’s where my Retirement Plan Tune-Up comes in. It’s a legal check-up that reviews the plan document, administration, and fiduciary oversight—identifying what’s working and what might need attention before it becomes a liability.

Plans need to evolve as businesses do. Sponsors need to ask whether the plan still fits the company’s needs and if there are lurking issues in how it’s being run. That’s why I write articles and blog posts that shine a light on the common pitfalls—things like missing investment policy statements, excessive fees, or poor documentation. These aren’t abstract concerns; they’re real issues that lead to real litigation.

Now, I’ve had critics over the years—some are even fellow ERISA attorneys—who argue that I’m just fearmongering. They say that small and mid-sized employers rarely get sued for fiduciary breaches, and that my legal services are overkill. To them, I say: that’s the plaque-causes-heart-disease argument all over again. Maybe it’s a stretch. Maybe it’s not. But we still avoid standing under trees during a lightning storm, even if the odds of getting hit are low. Litigation evolves, and when plaintiffs’ attorneys exhaust the large plans, they’ll start looking downstream.

At the end of the day, good practices help avoid bad outcomes. Just like brushing and flossing, regularly reviewing your retirement plan is common sense. You don’t want to wait for the ERISA version of a root canal.

Those small employer plans like SEPs and SIMPLE-IRAs? They’re great starter tools for retirement savings. Think of them like toddler clothes: low maintenance, affordable, and easy to manage. No administration costs, no annual 5500s, and they get the job done—for a while.

But like kids’ clothing, there comes a time when these plans no longer fit. When’s that time? It’s when your business starts growing—specifically, when you add employees who aren’t owners or family. These plans don’t allow for contribution disparity. That means if you want to give yourself a 15% contribution, you’ve got to give the same to your eligible employees. There’s no flexibility. And in a SEP, there are no employee salary deferrals. In a SIMPLE, deferrals are capped and employer contributions are limited. Translation: you’re carrying the full load on funding.

That’s when you know it’s time to graduate to something more robust—like a 401(k) plan or even pairing that with a cash balance plan if your business can support it. Don’t wait until the plan stops working to make the change. Know when the SEP no longer fits—and be ready to upgrade before your business growth turns into a compliance headache.

For the first time, That 401(k) Conference returned to the same venue. On Friday, May 9, 2025, we returned to Kansas City at Kaufmann Stadium, home of the Kansas City Royals.

We had a great event there in 2019 and we will had a great event in 2025.

We had some great presentations, a nice turnout, and a great guest in Royals broadcaster Rex Hudler.

We return with a live event in Anaheim on June 5th.

The Department of Labor recently issued Field Assistance Bulletin (FAB) 2025-01, which amounts to a temporary enforcement policy around the transfer of small retirement plan benefits — think $1,000 or less — to state unclaimed property funds. If that sentence alone gave you heartburn, you’re not alone. It’s another example of the DOL trying to thread the needle between fiduciary responsibility and administrative reality, especially when it comes to missing participants.

Let’s be clear: this FAB doesn’t change the law. It’s simply the DOL saying, “We won’t come after you under ERISA… for now… if you meet these very specific conditions.” Translation: temporary safe harbor — but only if you do your homework.

Here’s the gist. If a plan fiduciary transfers small balances (including uncashed checks) to a state’s unclaimed property fund, the DOL won’t enforce ERISA fiduciary breaches as long as all the conditions in the FAB are met. And there are plenty of them.

To start, the benefit in question must be $1,000 or less — and no, you can’t fudge that number by ignoring rollover contributions. You do get to ignore any outstanding plan loans, though.

To get the enforcement relief, here’s what you need to check off:

· You must determine the transfer is prudent — not just easy, not just common practice, but prudent under ERISA.

· You need to have a solid missing participant program in place, aligned with the DOL’s Missing Participants Best Practices. If you haven’t read those, now’s the time.

· You must send the funds to the state unclaimed property fund tied to the participant’s last known address.

· The SPD must disclose the possibility of transferring funds to the state, and include full contact info for someone at the plan who can answer questions. (Good luck finding someone who actually wants to answer those calls.)

· The state fund itself must meet a laundry list of conditions, including not charging fees, offering perpetual claims, searchable websites, and participating in MissingMoney.com and the Unclaimed Property Clearinghouse. In short, it has to be a real, functioning system — not some state-run black hole where money goes to die.

There’s a little bit of grace here: fiduciaries can rely on the state treasurer’s word that a fund meets the criteria, unless they have actual knowledge otherwise. But if you know better — or should know better — don’t count on plausible deniability.

Now, I’ve worked with enough plan sponsors to know this kind of administrative spaghetti isn’t what they signed up for. The reality is, dealing with unclaimed property compliance is a full-time job — and most sponsors and recordkeepers are already overworked and understaffed. The DOL’s intent here is fair: get money back in the hands of participants. But the execution? Burdensome, unclear, and impractical for most.

My take? Leave the unclaimed property headaches to professionals. I’d rather send the check to my friends at PenChecks and sleep at night. Let someone else deal with verifying state eligibility, tracking down participants, and jumping through hoops.

Because in this line of work, doing something “temporarily OK” under a FAB isn’t worth the risk of getting burned later when the rules change.

If you’re a 401(k) plan provider and think you can get away with charging sky-high fees while prioritizing your own bottom line, think again. A federal jury just reminded us all—fiduciary responsibility under ERISA isn’t just a suggestion, it’s the law.
In the case of Khan et al. v. Board of Directors of Pentegra Defined Contribution Plan et al., a class of over 26,000 participants in Pentegra’s $2.1 billion Multiple Employer Plan for Financial Institutions sued over—you guessed it—excessive fees, self-dealing, and failure to act like actual fiduciaries.
The plaintiffs alleged that Pentegra:

• · Let the plan rack up unreasonably high administrative and recordkeeping fees.
• · Lined its own pockets instead of looking out for participants (a big ERISA no-no).
• · Didn’t even bother using the plan’s scale to negotiate better deals. Spoiler: when you’ve got $2.1 billion in assets, you’ve got leverage. Use it.

Apparently, the jury agreed. After a close look at the facts, they hit Pentegra with a $38.7 million verdict—a clear message that fiduciary breaches are expensive, especially when you’re dealing with retirement assets.
This case is more than just a big number. It’s a wake-up call. If you’re a fiduciary, acting in the best interests of plan participants isn’t just your job—it’s your legal duty. Ignore that, and you might just find yourself on the wrong side of a courtroom, with a jury reminding you exactly how much that duty is worth.

T. Rowe Price announced today the launch of in-plan emergency savings accounts (ESAs) for participants in retirement plans.

This ESA solution was made possible by the SECURE 2.0 Act of 2022, which includes a provision for pension-linked emergency savings accounts. This allows non-highly compensated employees to save up to $2,500 for emergency expenses within their 401(k), 403(b), or governmental 457(b) plans, if permitted by their plan.

Once participants reach the $2,500 limit, any additional contributions will be automatically converted to non-ESA Roth contributions for their retirement accounts.

Nothing surprises me much anymore, neither should the results of the survey that a Nasdaq 100 survey supports the inclusion of Nasdaq 100 index funds.

According to the Annual Nasdaq-100 Retirement Plan Survey, nearly 80 percent of 401(k) plan participants recognize the importance of including a Nasdaq-100 product in their investment options. This finding suggests a new market opportunity for retirement plans.

The survey, which included 1,000 401(k) participants and reflected the 2023 U.S. Census data regarding gender, age, and region, revealed significant demand among investors for the index within retirement plans.

As of December 31, 2024, Americans held $12.4 trillion in all employer-based defined contribution retirement plans, with $8.9 trillion of that in 401(k) plans, according to a quarterly report from the Investment Company Institute published on March 25, 2025.

However, data from over 700,000 401(k) plans shows that the allocation to Nasdaq-100 Index mutual funds accounts for less than 1% of all 401(k) assets. This is a notable underrepresentation compared to allocations in the S&P 500 and other large-cap growth indexes, as indicated by BrightScope Beacon.

Look, I get it. There are a lot of lawyers out there. Ambulance chasers, courtroom showmen, legal eagles with late-night TV spots and suspiciously white teeth. But here’s the thing: I’m not one of them.

I don’t sue over wet floors in fast food joints. I don’t call myself “The Hammer.” I don’t drive a wrapped SUV with my own face plastered on it. I’m an ERISA attorney.

Yes—E-R-I-S-A. No, it’s not the name of a small town in Tuscany. It’s the Employee Retirement Income Security Act. You know, that delightful little statute from 1974 that governs things like 401(k)s, pension plans, fiduciary duties, benefit denials—stuff that makes normal people fall asleep and me stay up excited.

But you wouldn’t know that if you looked at my LinkedIn inbox.

Every day, like clockwork, I get invitations from people who clearly think I’m running some kind of negligence sweatshop. “Hey, thought we could connect! We help PI attorneys grow their practice.” PI?! You mean “Personal Injury”? Not even close, buddy. Try “Plan Interpretation.”

And then there are the insurance sales reps. God love ’em, but come on. I’m not looking to buy another policy. I read insurance policies for a living. I parse subrogation clauses like they’re poetry. I’ve spent hours in ERISA plan documents trying to decipher whether “must” actually means “must,” or if it somehow means “unless the claims administrator is in a bad mood that day.”

I even had someone message me asking if I needed help with my “injury intake process.” My what?! I handle fiduciary breach claims, not fractured femurs.

Look, I don’t want to be a jerk. I like connecting. I like networking. But it’s like calling up a tax accountant and asking if they can help fix your car. Wrong person, wrong skill set, wrong planet.

So, if you’re thinking about hitting “Connect” and your opening line is “We help injury lawyers win more cases,” please—for the love of Section 502(a)—do a little scroll through my profile. Check the acronyms. If you see ERISA, fiduciary, plan sponsor, or “I once got into a heated argument about COBRA continuation rights at a wedding,” you’re probably barking up the wrong legal tree.

And that’s fine. I’m not offended. I’m just… exhausted.

Now, if you’ve got a hot take on retirement plan governance, or you want to chat about how excessive fee litigation is reshaping fiduciary standards, I’m all ears. But if you’re about to pitch me on a slip-and-fall case involving a rogue quesadilla at a Tex-Mex joint, I’m out.

You know what everyone’s talking about lately in the retirement plan world? Pooled Employer Plans — PEPs! Yeah, PEPs. Like they’re the second coming of sliced bread. Spoiler alert: they’re not.

I’ve been talking to a bunch of TPAs, advisors, people in the know — and guess what? Most of us are scratching our heads. PEPs? Meh. They’re not bad, but let’s not throw a parade. And here’s the kicker: providers are diving into them like it’s a gold rush, and half the time, they’re getting the pricing completely wrong. You think you’re getting $100 million in assets, and suddenly it’s $3.42 and a stick of gum. It’s like buying oceanfront property in Nebraska — looks great on paper.

Now, is there an opportunity here? Sure, yeah. In theory. But the math has to work. You need enough assets to make it worth anyone’s while. Otherwise, you’re just stealing from your own single-employer plan business to prop up a shiny new PEP. That’s not growth — that’s just cannibalism in a suit.

The real value in these things? Outsourcing fiduciary duties. That’s the pitch. Not the pricing. Let’s be honest — most PEPs aren’t saving anyone real money. Maybe a few bucks, a couple slices of pizza. That’s not a game-changer. That’s lunch.

Bottom line: PEPs are gonna be a niche thing. And only the ones who get that — the ones who focus on bundling assets like it’s a Costco run — they’re the ones who’ll survive. Everyone else? Eh. Good luck.

Following a jury’s decision to award over $38 million to a class of more than 26,000 participants in Pentegra’s multiple employer plan, the issue of working with providers affiliated with the plan sponsor highlights the potential conflict of interest that I have been emphasizing for many years.

In the case of Khan et al. v. Board of Directors of Pentegra Defined Contribution Plan et al., the jury determined that the fiduciaries of the Multiple Employer Plan, which has more than $2 billion in assets, breached their fiduciary duties under the Employee Retirement Income Security Act by paying unreasonable recordkeeping and administrative fees. The core of the plaintiffs’ complaint centered on the allegations that the defendants failed to ensure that the fees paid by the plan were reasonable for the services received when retaining Pentegra Services Inc. as a service provider.

Using an employer’s own affiliated company as a service provider is problematic, especially with $2 billion in assets at stake. This type of case is exactly the kind that attorney Jerry Schlicter pursues, and this was one of his cases.

The plaintiffs accused Pentegra of profiting from collecting additional fees directly from the employers participating in the Multiple Employer Plan (MEP).

According to a summary of the case, Pentegra President and CEO John Pinto served as a non-voting board member of the plan while also being the president of Pentegra Services Inc. Pinto and the other board members named in the lawsuit were found by the jury to have breached their fiduciary duties. This case serves as a warning for those who use plan providers with even a slight affiliation. If your organization is large enough, you could become a target.