The Rosenbaum Law Firm P.C. Blog

I’ve always said, “You’re only one rigorous process away from averting a major fiduciary failure.” It’s one thing to trust your advisors — but completely another to delegate without oversight. So when I saw the article in NAPA – National Association of Plan Advisors titled “Suit Says Plan Sponsor ‘Uncritically Relied’ on Advisor TDF Choice,” I flipped back through the decades of plan-committee meetings I’ve sat in, the ones where we drilled into vendors and funds and saved clients from themselves.

Here’s the gist of the case: In Elanco US, Inc.’s 401(k) plan (case caption: Phillips v. Elanco US, Inc., filed Oct. 21, 2025 in the U.S. District Court for the Southern District of Indiana), participant-plaintiffs accuse the plan’s fiduciaries and the investment adviser of breaching their duties. The complaint claims that the committee “uncritically relied” on the adviser in selecting and retaining a suite of American Century Target Date Funds as the plan’s Qualified Default Investment Alternative (QDIA) and core target-date funds, despite persistent underperformance, high turnover, shrinking market share and a clear plan policy that required under-performing funds (score < 65) to be flagged for review.

Why I View This as a Red-Flag for Plan Sponsors

1. Delegation is not abdication. You can hire a 3(21), have an adviser, outsource many operational tasks—but you remain the fiduciary for selection, monitoring, replacement. This complaint says the committee let the adviser do the heavy lifting and then sat back. That’s vulnerable.

2. Process over performance—but performance still matters. Under ERISA, a proper process may keep you safe even if the fund underperforms. Here, the suit alleges the plan policy said “score under 65 → watch list,” yet the committee didn’t act. That gets to the heart of prudence: it’s not just the tool you used (advisor + fund); it’s how you governed it.

3. The “unreasonable delay” element is emphasized. The complaint alleges the committee “delayed too long” to replace the under-performing TDFs despite knowing of the red flags. In plain Ary-Rosenbaum language: when the gear’s squeaking, you don’t wait for full failure before pulling the lever.

4. The stakes are real: “tens of millions of dollars” lost. The plaintiffs allege the mistakes caused “tens of millions” in losses for participants. Whether or not that number holds up, the message is clear: poor oversight = potential multi‐million liability

What You Should Do Now (Yes, this is the “Ary” checklist)

· Pull your TDF/QDIA suite. Who are the vintages? What are the benchmark returns, peer-group comparisons, turnover, asset-flows? Run a “score <65” type analysis (or something equivalent) and document the result.

· Check your advisor-committee relationship. Service agreement, scopes, meeting minutes: Did the adviser provide analysis? Did the committee challenge it, ask tough questions, get benchmarking data? If your documentation is light, you’ve got exposure.

· Review your investment policy statement (IPS). Does it require periodic suitability/switch reviews? Does it define watch-list triggers? If it says one thing and you do another—or worse, you do nothing—you’re behind.

· Monitor timing and replacement decisions. If you find a fund that’s underperforming, how long until you take action? The court of public opinion (and the plaintiffs’ bar) is increasingly looking at delay as evidence of imprudence.

· Document like your audit depends on it. You’ll want minutes that reflect “we reviewed performance, asked these questions, concluded to stay because of X, Y, Z” OR “we reviewed and concluded to replace effective date Z.” When the next complaint hits, you’ll need that trail.

Final Word to the Fiduciary Tribe

Let me speak directly to all the plan committee chairs, the HR leaders, the in-house counsel reading this: your plan is notthe place to be passive. You’re not just reviewing pie charts and fee schedules—you’re managing a promise to your employees. That promise says: “We will give you a retirement vehicle, guided by prudence, to build tomorrow.” When you say to yourself, “But the adviser told us it’s okay”, ask this question: Did you challenge the adviser? Because the lawsuit says: sitting quietly = “uncritically relying.”

In the days when my grandfather Emil taught me the value of a well-tightened watch gear, he meant: every piece must mesh. In retirement-plan fiduciary work, your watch is the TDF suite, the adviser, the committee process, the IPS. If one gear is loose—you hear the squeak long before the damage sets in.

If you ever want to know how strong your fiduciary process really is, don’t look at the investment lineup—look at your meeting minutes.

I’ve reviewed enough plan files to know that some committees treat minutes like an afterthought. You’d see one sentence: “Reviewed funds. No changes.” That’s not a record; that’s a liability.

In ERISA world, silence isn’t golden—it’s incriminating. If it’s not written down, it didn’t happen. The plaintiffs’ attorneys love that. They’ll wave your minimalist minutes in court and ask, “So what exactly did you review?”

Good minutes don’t need to be novels. They just need to show a prudent process: which reports were discussed, what questions were asked, what decisions were made, and why. It’s not paperwork—it’s protection.

So the next time your committee wraps up a meeting early, take five more minutes to document what you did. Because when the lights go out and the subpoenas come on, silence in the minutes can be deafening.

Every year, I see plan sponsors spend thousands on shiny “financial wellness” programs—apps, webinars, and surveys promising to fix participant behavior. Yet, the same plans still have high loan rates, poor deferral averages, and zero engagement. Why? Because you can’t build wellness on a broken foundation.

If your plan design traps participants with high fees, limited fund options, or auto-enrollment at 3%, no amount of budgeting tips will save them. Financial wellness isn’t a motivational poster—it’s a structural commitment.

Start by fixing the plan before preaching the sermon: review match formulas, reexamine defaults, simplify choices, and communicate like humans, not HR bots. Real wellness happens when the plan helps participants succeed by design, not by luck.

In other words, you can’t give people financial peace of mind while quietly making their savings harder to grow. Wellness starts with the plan sponsor, not the app.

In the retirement plan world, there aren’t many do-overs. You don’t get to “try again” after a fiduciary breach, a failed compliance test, or a DOL investigation. You get one shot to get it right.

I’ve seen too many plan providers treat their work like rehearsal—assuming someone else will fix the missed deadlines, clean up the sloppy plan document, or explain the mistake to the client. That’s not professionalism; that’s passing the buck.

Being a plan provider means owning your work like it’s going to be audited tomorrow—because someday, it will be. Every signature, every disclosure, every vendor selection matters. When you operate like your reputation depends on it, it usually doesn’t get questioned.

Whether you’re a TPA, advisor, or ERISA attorney, your clients remember when you got it right the first time—and they never forget when you didn’t. The fiduciary world doesn’t reward perfection, but it punishes carelessness.

So don’t treat your work like a draft. You get one shot. Make it count.

In this business, every conference has that one person who wants everyone to know they’re the smartest person in the room. They quote obscure ERISA sections, correct speakers mid-panel, and use acronyms like they’re throwing fastballs. The problem? No one hires the smartest person in the room—they hire the one who makes their life easier.

I’ve built a career in a field full of technical experts, but what separates a real plan provider from a walking compliance manual is the ability to translate complexity into clarity. Plan sponsors don’t want to hear the Internal Revenue Code recited back to them; they want to know what it means for their plan, their employees, and their risk.

I’m not saying expertise doesn’t matter—it’s everything. But expertise without empathy is arrogance. The job isn’t to impress; it’s to guide. When a client calls in a panic about a failed ADP test, they don’t want a Latin lecture—they want calm, clear action steps.

Being the smartest person in the room might stroke your ego. Being the most useful keeps you in business.

When I started in this business, plan sponsors worried about lost checks. Now, they should be worried about lost data. Back then, if a participant’s address was wrong, you mailed a letter and hoped for the best. Today, if a hacker gets your payroll feed, you’re not mailing letters—you’re calling your cyber insurer and your lawyer.

ERISA’s Section 404 talks about acting prudently and solely in the interest of participants. That used to mean watching fees, monitoring investments, and keeping minutes. But in 2025, prudence means locking down your participant data like it’s Fort Knox. Every Social Security number, every date of birth, every account balance—those are plan assets in digital form.

The Department of Labor isn’t subtle about it anymore. Cybersecurity is a fiduciary issue. If your TPA or recordkeeper treats data protection like an afterthought, that’s your problem too. Because if participant data gets breached, no one’s pointing fingers at the IT guy—they’re pointing them at you, the plan sponsor.

So, ask questions. Demand documentation of your providers’ security protocols. Review your internal controls. Don’t let an intern email participant data unencrypted. You wouldn’t leave plan assets in a shoebox under your desk, so don’t leave sensitive data floating around in Outlook.

Fiduciary prudence used to mean “protecting the money.” Now it also means protecting the information about the money. Data is the new 404—and unlike plan assets, once it’s leaked, you can’t roll it back into the trust.

I’ve been in this business long enough to know that the only thing “simple” about a 401(k) plan is the way people pretend it is. Every provider brochure says “turnkey,” “easy to administer,” or my personal favorite, “set it and forget it.” The problem is that the Department of Labor never forgets.

When I started out, I thought complexity was the problem. Now I know it’s denial. Plan sponsors want to believe a retirement plan runs itself. Payroll’s on autopilot, the TPA’s on it, and the advisor’s keeping watch. But one missed deposit or a misclassified employee later, and that “turnkey” plan turns into a compliance whack-a-mole.

Good providers don’t sell simplicity, they translate complexity. They build systems that catch errors before they become DOL letters. They educate clients who think an audit means “someone’s getting fired.” And they never promise perfection, just accountability.

If your client thinks their plan runs itself, remind them: 401(k)s aren’t Crock-Pots. You can’t just set it and walk away. Because when things boil over, it’s always the provider cleaning the mess.

Somewhere in Washington, someone at the Department of Labor must have a “Fiduciary Rule” dartboard. Every few years, they take a throw, hit a new buzzword, and decide it’s time for another rewrite. We’ve had more drafts of this rule than Rocky sequels, and at least with Rocky, you knew he’d eventually get up off the mat.

For plan providers, it’s déjà vu all over again. We’ve built policies, rewired procedures, rewritten disclosures, and retrained staff more times than I can count. Then, just when the industry adjusts, a new administration decides to “reimagine” what fiduciary really means. Translation: everyone spends six months reading proposed regs and pretending they understand them.

Here’s the truth, being a fiduciary isn’t about whatever version the DOL drops next. It’s about acting in the client’s best interest every single day, whether there’s a rule or not. The good providers don’t wait for Washington to tell them how to behave, they already have a compass.

Still, every time this roller coaster starts again, I keep my seatbelt fastened and my expectations low. Because unlike Rocky, this saga doesn’t end with triumph, it just resets for the sequel nobody asked for.

Working with a plan sponsor recently, I was helping sort out a late Form 5500 issue. Pretty routine stuff, until I learned they’d already heard from the IRS about it a year ago. A year! It reminded me of my mother-in-law, who’d never tell you she was sick when it happened, but would casually drop the news six to twelve months later, like it was an afterthought. (“Oh, did I mention I had surgery last spring?”)

That kind of delayed disclosure doesn’t just cause family headaches, it causes plan headaches.

Your 401(k) provider, whether it’s a TPA, ERISA attorney, or recordkeeper, can’t fix what they don’t know. We’re not mind readers, and we don’t have a magic portal into your inbox. If the DOL or IRS sends you a letter, tell us. Immediately. The longer you sit on it, the worse the problem gets, and the fewer options we have to make it right.

Providers are supposed to be your retirement plan experts, but we can’t help you if we don’t know what’s going on. Silence is not a strategy. Communication is.

So next time you get a notice, an inquiry, or even a nagging sense that something might be off, loop in your plan team early. They’ll thank you, and you’ll avoid turning a fixable issue into a full-blown regulatory migraine.

Because in the 401(k) world, just like in family life, the sooner you talk about the problem, the easier it is to solve.

The U.S. Department of Labor has announced plans to revisit and likely revise the fiduciary-advice rule in 2026, signaling significant potential shifts for plan sponsors and advisers.

Here are my key takeaways:

· At issue is the definition of “fiduciary adviser” under ERISA. The current rule — known as the “Retirement Security Rule” — is still tied up in litigation in the 5th Circuit.

· The DOL’s regulatory agenda offers little detail on exactly how the rule will change, stating only that the new regulation “will ensure that the regulation is based on the best reading of the statute.”

· Two realistic pathways:

1. Rescind the existing rule outright, reverting to the 1975 standard.

2. Rewrite the rule: either amend the current structure or overhaul it from scratch.

· A wrinkle: the DOL may also seek to consolidate multiple guidance items (like Prohibited Transaction Exemption 2020-02) into one coherent fiduciary framework. That would help reduce fragmentation and confusion.

· Timing and priorities matter. With ESG, alternatives, government funding, and staffing constraints all in play, it’s far from guaranteed the DOL will finalize a new rule by its target date.

Why this matters If your role involves advising, sponsoring, or managing retirement plans, this rulemaking could alter who is deemed a fiduciary, what advice triggers fiduciary status, how compensation is treated, and how plan fiduciaries oversee advisers. Governance, contracts, disclosures, and adviser-selection processes may all need revision.

My takeaway While the exact form remains unclear, the fiduciary landscape is headed for change. Plan sponsors and advisers should stay ahead: revisit current adviser arrangements, consider where fiduciary risk may exist now, and plan for adjustments to governance and oversight. The fiduciary bar may not get lowered, it might just shift.