The Rosenbaum Law Firm P.C. Blog

Let’s get one thing straight: The Shawshank Redemption isn’t just about prison. If you think it’s just a story about a guy escaping through 500 yards of foulness, you’re missing the point—and probably still stuck in your own version of Shawshank, whether it’s a toxic workplace, a career you never chose, or a family that gaslights you over breakfast.

Andy Dufresne was a banker wrongfully convicted of murder. But his real sentence wasn’t the prison walls—it was the assumption that he had no control over his life. Sound familiar? Because for a lot of us, our own Shawshank is disguised as a six-figure job at a “prestigious” law firm, or a family who defines loyalty as “never making them uncomfortable.”

Andy didn’t just break out of Shawshank. He quietly, meticulously reclaimed his destiny. And while I never used a rock hammer to tunnel through a wall, I did carve my way out of law school, out of a law firm that thought 80-hour weeks and soul death were part of the benefits package, and out of a family system that believed conformity was the price of love.

What did it take? Hope. And not the naive, bumper-sticker kind. I’m talking about the kind of hope that looks like insanity to people who are still imprisoned. The kind of hope that makes you start your own firm with no net, write blogs like this one, and build a life where you call your own shots—even if the first few years feel like solitary confinement.

You don’t get out in a day. Andy didn’t. He spent 19 years digging behind a poster of Rita Hayworth while laundering warden bribes. You and I? We spend years pretending that burnout is just part of “making partner,” that dysfunction is tradition, that Sunday night dread is a fact of life. It’s not.

Here’s the deal: You don’t have to stay in a prison just because you helped build it.

Andy said it best: “Get busy living or get busy dying.” For me, living meant leaving. Leaving the firm. Leaving law the way it was “supposed” to be practiced. Leaving relationships that drained more than they gave.

I don’t know your Shawshank. But I know it’s real. And I know there’s a Pacific Ocean waiting—if you’re willing to start chipping away.

Alright, listen—I’m stubborn. I admit it. There are just some things I don’t understand, and when I don’t understand something, it sticks with me. It burrows into my brain like a woodpecker with an agenda.

So I get this call. Financial advisor. Nice guy, polite. He asks about how I price my retirement plan document work—specifically my flat fee. I tell him, “Two thousand bucks. That’s it. That’s the price.” Straightforward, right?

Then he hits me with this: “Does the fee change if the plan has, like, thousands of participants?”

What? Thousands? No! What does that have to do with anything? I mean, sure, I get the curiosity, but c’mon. Drafting a plan for one guy in a cardigan or drafting one for an entire Fortune 500 army—it’s the same document. Same rules, same IRS pre-approved volume submitter plan. I don’t suddenly type faster because there are more participants. I’m not being paid by the comma.

So I explain this to him. I tell him: “Look, the number of participants—that’s a TPA issue. They’ve got the sub-accounts, the statements, the whole buffet of administrative nightmares. That’s where the scaling happens. Not with me.”

I mean, what does he think I’m doing? Personalizing each plan with tiny names etched in the margins? “Oh, Janet from Accounts Payable is in this one. Better raise the fee!”

And by the way—I’m no TPA expert, but I’ve been around. I know enough to know that the only fee that should scale with assets is the custody fee. That makes sense! Six to eight basis points, fine, because you’re holding more stuff. You’re the vault. You want a bigger vault? You pay a little more. That I can get behind.

But here’s where it gets nuts.

Some of these well-known, highly regarded TPA firms—they’re still charging administration fees based on plan assets. Assets! Like they’re investment advisors! What are we doing? That’s like me saying, “Oh, your plan has 3,000 participants? That’ll be $200,000. Because… reasons.”

It makes no sense! The amount of money in the plan doesn’t make it more difficult to administer. It’s not like the server is sweating under the weight of extra zeros. You’ve got 100 participants whether it’s a $10 million plan or a $100 million plan. Same statements, same calculations, same work. The decimal place just moved over.

Look, I know what people are gonna say. “If the client’s okay with it and it’s disclosed, it’s fine.” Sure. But you know what else is disclosed? Airline baggage fees. And we still complain about those, don’t we?

Call me old-fashioned. Call me stubborn. But I believe in this crazy little thing called logic. A fee should relate to the work involved. Not some arbitrary number you pulled out of a pie chart.

Anyway, that’s my rant. I feel better now. Sort of.

Many moons ago, I got a call from a bank with a problem. For two decades—yes, twenty years—they had failed to include bonuses as part of plan compensation. The kicker? They were supposed to. This wasn’t a gray area; the plan document was crystal clear. I gave them the only legitimate answer: file under the IRS Voluntary Compliance Program (VCP). It wasn’t fun, but it was the right play.

But instead of taking that advice, the bank went shopping and found an ERISA attorney who told them they could just self-correct. Self-correct? For 20 years of errors and who-knows-how-many participants? That’s not self-correction—that’s magical thinking. Sure, they could try to self-correct. And G-d help them if an IRS agent ever knocks on the door.

There are plenty of plan providers and attorneys who pride themselves on being aggressive for their clients. They push the envelope, bend the rules, and tell clients exactly what they want to hear. But there’s a difference between being aggressive and being reckless. Fly too close to the sun and you might not just get burned—you might take your client down with you. And the IRS or DOL? They don’t exactly hand out sunscreen.

I love Las Vegas. Great restaurants, great shows, and five trips in a row without dropping a nickel into a slot machine. Why? Because I hate gambling. I hate losing even more. Honestly, just getting out of bed every morning is risky enough for me.

That said, I see a lot of plan sponsors who seem to love gambling a whole lot more than I ever could. They make a bet that a compliance error will just quietly disappear. Instead of self-correcting, they cross their fingers and hope the statute of limitations on that year’s Form 5500 runs out before the IRS or DOL comes knocking. That’s not strategy—that’s a Vegas-style long shot with terrible odds.

Here’s the thing: when the cost of fixing the problem is a fraction of what the government could hit you with if you get caught, refusing to correct it is a fool’s bet. You’re not gambling with the house’s money—you’re gambling with your own. And in this game, the house (a.k.a. the IRS or DOL) doesn’t lose often.

Self-correction and the Voluntary Compliance Program exist for a reason—they’re your best path out when you’ve made a mistake. Betting on getting lucky with an audit isn’t just bad compliance; it’s a great way to get fired by any third-party administrator that knows what they’re doing. Worse, if you do get audited, you’ve lost all credibility, and now you’re at the mercy of someone with the power to levy real pain.

Vegas is for shows and steak dinners—not your retirement plan compliance strategy.

I always say that plan sponsors need a solid team: an experienced financial advisor, a competent third-party administrator (TPA), and a knowledgeable ERISA attorney. But let’s talk about that word—experienced. Like “reasonable fees,” it’s one of those terms that gets thrown around like it actually means something. The problem? It’s vague.

Experience isn’t just about how many years someone’s been in the game. Years in the business is just one data point. I’ve met financial advisors with 30 years under their belt who still couldn’t tell you what an investment policy statement is. Real retirement plan experience might mean how many plans a provider actually works on, how well they understand plan design, or whether they do the little things that others overlook—like participant education or staying on top of fee disclosures.

A few years back, a financial advisor—who’s made quite a name for himself—pushed back when he heard I stress “experience.” He had 3½ years in the business and took offense, thinking I was just talking about years. He told me his commitment to doing the right thing for clients beat out plenty of 35-year veterans. My response? Preaching to the choir, buddy—I’ve seen what “experienced” really means.

Let me take you back. I spent 2½ years at a law firm. We had ERISA partners who were supposedly the best in the business. But they came from the multiemployer (Taft-Hartley) world—a whole different animal than single-employer 401(k) plans. Some of them didn’t know the first thing about revenue sharing, plan fees, or participant education. One of these partners even served as a trustee on the firm’s 401(k) plan. He never hired a financial advisor, never reviewed investments with the other trustees, and never gave participants any education. The firm’s fiduciary liability? Through the roof. Would you hire that guy to advise your plan just because he’s a partner and has “ERISA” in his title? I wouldn’t.

At another firm, I worked with one of the top ERISA attorneys in the country—again, from the multiemployer side—who didn’t know what revenue sharing was or why plan sponsors should care about administrative fees. Let that sink in.

Same story for financial advisors. You can have someone managing a billion dollars, but if they don’t have any real experience with retirement plans—or worse, they’ve got dozens of plans but do nothing beyond showing up for the annual review—it doesn’t mean much. No investment policy statement, no participant education? That’s not retirement plan support, that’s checking a box.

And TPAs? Some are great, but others can’t handle anything outside the cookie-cutter box. Daily valuation? Forget it. Defined benefit? Out of their depth. New comparability? Not a clue. Just because someone can administer a plan doesn’t mean they should.

The bottom line: “experience” isn’t one-size-fits-all. Plan sponsors need providers with the right experience for their plan’s size, structure, and complexity. That doesn’t always mean the longest résumé—it means the best fit.

So how do you find the right fit? Word of mouth helps. So does asking the right questions. Don’t be afraid to dig. Ask about plan design experience, fee benchmarking, participant education, and compliance support. If they stumble? That’s your answer.

Blue Ridge Associates announced today that it has acquired Qualified Retirement Plan Services, Inc. (QRPS) based in Raleigh, North Carolina.

Founded in 1988, QRPS manages over 1,000 retirement plans that serve more than 31,000 participants, with assets exceeding $2 billion, primarily within the small and middle-market business community.

In comparison, Blue Ridge Associates manages 8,700 plans, serving over 875,000 participants.

For years, I observed that federal courts were growing weary of cases involving fee litigation, but then the Supreme Court changed that perspective.

The Supreme Court issued a unanimous decision in Cunningham v. Cornell University, a landmark case concerning the management of retirement plans under the Employee Retirement Income Security Act of 1974 (ERISA). This ruling significantly lowers the requirements for plaintiffs to file ERISA claims, potentially transforming the landscape of retirement plan litigation.

The case stemmed from a lawsuit involving 28,000 Cornell University employees who alleged that the university’s retirement plan fiduciaries engaged in prohibited transactions by paying excessive fees to service providers such as TIAA and Fidelity Investments. The plaintiffs argued that these arrangements violated ERISA’s prohibitions against certain transactions with interested parties. Lower courts had previously dismissed the case, requiring plaintiffs to address potential statutory exemptions under ERISA § 408 in their initial pleadings. However, the Supreme Court reversed this position.

Justice Sonia Sotomayor, writing for the Court, clarified that plaintiffs need only allege the elements of a prohibited transaction under ERISA § 406(a). Any exemptions under § 408 are considered affirmative defenses that defendants must assert and prove. This decision has resolved a division among federal appellate courts regarding the pleading requirements for ERISA claims. By shifting the burden of proving exemptions to the defendants, the ruling may lead to an increase in ERISA litigation, as plaintiffs encounter fewer obstacles at the early stages of a lawsuit.

Justice Samuel Alito, in a concurring opinion, acknowledged this possibility, noting that more claims might survive early dismissal, thereby increasing pressure on defendants to settle. The Cunningham decision highlights the Supreme Court’s commitment to ensuring that employees have a fair opportunity to challenge potential mismanagement of retirement plans. As the case returns to the lower courts for further proceedings, it sets a precedent that could influence how retirement plan fiduciaries manage and document their decision-making processes to withstand judicial scrutiny.

For employers and plan administrators, this ruling serves as a vital reminder of the importance of transparency and diligence in managing retirement plans. It also underscores the evolving legal standards governing fiduciary responsibilities under ERISA.

Whole Foods Market has agreed to settle a class-action lawsuit that alleged the company failed to prudently manage the administrative fees of its $1.9 billion 401(k) plan, resulting in millions in losses for employees.

The lawsuit, filed in 2023 by former employees under the case name: Winkelman v. Whole Foods Market, Inc., accused the Amazon-owned grocery chain of breaching its fiduciary duties under the Employee Retirement Income Security Act (ERISA).

Specifically, the plaintiffs claimed that Whole Foods allowed excessive recordkeeping fees charged by Fidelity Investments, the plan’s recordkeeper, between 2016 and 2020. These fees reportedly ranged from $31 to $34 per participant annually, which the plaintiffs argued were significantly higher than those charged by comparable plans at companies like Apple, Costco, Lowe’s, Google, and Macy’s, where fees ranged from $8 to $23 per participant.

The plaintiffs contended that given the size of Whole Foods’ 401(k) plan—classified as a “jumbo” plan due to its substantial assets and participant count—the company had significant bargaining power to negotiate lower fees but failed to do so. They asserted that this oversight constituted a breach of the company’s fiduciary responsibilities to plan participants.

After a private mediation session, both parties reached an agreement to settle the lawsuit. While the specific terms of the settlement have not been disclosed to the public, the parties plan to file details for court approval by mid-June 2025.

I have experienced several bear markets as an ERISA attorney, and it’s never easy, especially with the current volatility due to tariffs.

If you are concerned about the stock markets and your 401(k) plan, you may not need to worry—unless you are nearing retirement. The only time you should be worried about falling stock prices is if you need to withdraw money from your 401(k) right now, either for living expenses in retirement or for emergencies. If you do not need to take money out soon, there is usually no reason to panic.

History has shown that markets can rebound quickly; short-term drops often do not indicate long-term trends. The stock market has encountered many periods of declining prices over time, such as the dot-com bubble of 2000, the events of September 11th, and the subprime mortgage crisis from 2007 to 2010, to name a few. However, overall stock market returns have averaged about 9% from 1994 to 2024, even including these downturns.

So, if you are a baby boomer approaching retirement and your 401(k) has recently taken a hit, try not to panic. Remember the saying: stock markets can go down as well as up. History suggests that, in the long run, it’s wise to work with a trusted financial adviser to strategize about your 401(k) retirement savings, especially during tumultuous times like those we’ve recently experienced in the stock market.

Growing up, I was a pessimist. I don’t know why, but I let every little thing get to me, and I realized that being negative often scares people away.

That’s why I recommend that when dealing with potential clients, you shouldn’t dwell on the negatives of their current plan. Always approach the conversation from a positive standpoint, highlighting how your services can significantly improve their situation.

Decision-makers often have egos, and no one likes to be reminded of poor decisions, even if those decisions are evident. Years ago, a certain third-party administrator (TPA) was going through a very public crisis. During that time, many other advisors and TPAs were calling this TPA’s clients, simply spreading negativity about them.

I can’t imagine those providers gained many clients this way because successful selling is all about what you can do for the client, not about how poorly the current plan provider is performing. While you need to differentiate yourself from the incumbent provider, it’s essential to do so from a positive perspective.