The Rosenbaum Law Firm P.C. Blog

Some plan sponsors believe that holding committee meetings automatically makes them good fiduciaries. I’ve sat through enough meetings to know that’s not true. A calendar invite doesn’t fulfill fiduciary duties. What matters is what actually happens in the room—and what gets written down afterward.

Too many committees meet just to meet. They review reports nobody understands, listen politely to providers who never get challenged, and approve recommendations without asking hard questions. Then they congratulate themselves for checking the fiduciary box and move on until the next quarterly meeting. That’s not governance. That’s theater.

ERISA doesn’t require perfection, but it does require process. A good committee meeting involves engagement. Why are fees structured this way? Why is this fund still on the lineup? Why hasn’t participation improved? Why are forfeitures being used—or not used—in a particular manner? Silence is not prudence.

Documentation matters just as much as discussion. If it’s not in the minutes, it might as well not have happened. I’ve seen excellent fiduciary decisions undermined because no one bothered to memorialize the reasoning. Plaintiffs’ lawyers don’t attack intentions; they attack paper—or the lack of it.

Committee meetings should be purposeful, focused, and honest. Sometimes that means uncomfortable conversations. Sometimes it means telling a long-time provider that change is necessary. That’s not disloyalty; that’s fiduciary responsibility.

Good fiduciaries aren’t defined by how often they meet. They’re defined by the quality of the decisions they make when it counts.

There’s a growing belief in the retirement industry that technology equals quality. Sleek dashboards, mobile apps, and automation are valuable, but technology alone doesn’t make a great plan provider. If it did, fiduciary breaches would have disappeared years ago.

Technology processes data efficiently, but it doesn’t question it. A system will happily run nondiscrimination testing on flawed payroll data or produce reports that look compliant on the surface while masking deeper issues underneath. Human judgment is still required to recognize when something doesn’t make sense and to ask the uncomfortable follow-up questions.

Great providers use technology as a tool, not a substitute for expertise. They understand that automation works best when paired with experienced professionals who can interpret results, spot anomalies, and explain implications in plain English. Clients don’t just need reports; they need context.

Over-reliance on technology can also create complacency. When everything appears automated and seamless, plan sponsors may assume compliance is guaranteed. That false sense of security is dangerous. Providers play a critical role in reminding sponsors that fiduciary responsibility can’t be outsourced to a platform.

The most effective providers strike a balance. They invest in technology to improve efficiency and accuracy, while maintaining a culture that values experience, skepticism, and communication. The future of plan services isn’t man versus machine—it’s knowing when the machine needs a human to step in.

One of the hardest parts of being a plan provider isn’t the complexity of ERISA—it’s the incomplete information. Providers are often asked to solve problems without being given the full picture, and that’s a recipe for compliance failures that no service agreement disclaimer can truly fix.

Plan providers rely on plan sponsor data to perform testing, draft amendments, determine eligibility, and spot compliance risks. Controlled group ownership, affiliated service groups, other retirement plans, payroll practices, mergers, acquisitions—none of this is optional context. When sponsors leave out details, whether intentionally or accidentally, providers are forced to work with blind spots that can undermine even the best systems and expertise.

The frustrating reality is that when issues surface years later, providers are often pulled into the blame cycle despite never having the facts needed to prevent the problem. The IRS and DOL don’t audit based on what the provider was told; they audit based on what actually happened. That disconnect creates unnecessary exposure for everyone involved.

Providers need to be proactive in setting expectations. Data-collection processes should emphasize completeness, not convenience. Annual questionnaires shouldn’t feel like busywork; they should be framed as risk-management tools that protect the sponsor and the provider alike. Educating sponsors on why certain questions matter can reduce resistance and improve accuracy.

Plan providers aren’t miracle workers. They can’t fix problems they don’t know exist. The best provider-client relationships are built on transparency, not assumptions. When providers insist on better information up front, they’re not being difficult—they’re doing their job.

I understand why some plan sponsors withhold information from their plan providers. Sometimes it’s embarrassment. Sometimes it’s fear of added cost. Sometimes it’s just not knowing what matters. Unfortunately, in the retirement plan world, hiding information never protects you—it only delays the damage.

Controlled group issues, affiliated service groups, other retirement plans, ownership changes, payroll quirks—these aren’t “nice to know” details. They are foundational facts that determine compliance. When a provider doesn’t have the full picture, they can’t give accurate advice, and the plan sponsor is still the one holding the fiduciary bag.

I’ve seen plan sponsors omit information unintentionally and end up with failed testing, missed coverage issues, or deduction problems that snowballed over multiple years. I’ve also seen sponsors intentionally stay quiet, hoping a problem wouldn’t surface. It always does—usually during an audit, a transaction, or litigation, when the stakes are highest.

ERISA is unforgiving about ignorance. You don’t get a pass because you didn’t mention something. Providers rely on what they’re told. If the information is incomplete, the advice will be too.

Transparency with your plan provider isn’t about trust—it’s about self-preservation. The more they know, the better they can protect you. The less they know, the more exposed you are.

If you want fewer surprises from the IRS, the DOL, or a plaintiffs’ lawyer, stop treating information like a liability. In the long run, secrecy costs far more than honesty ever will.

If you’ve been paying attention to retirement plan news lately, you know that alternative investments are no longer a fringe conversation. They’re front and center. The Department of Labor has now taken a significant step by sending a proposed rule on alternative investments to the White House for review. This isn’t casual guidance or a vague press statement. It’s a formal regulatory move that could shape how defined contribution plans look for years to come.

This proposal traces back to last year’s executive order directing the DOL, Treasury, and SEC to reexamine how ERISA fiduciaries handle private markets and other non-traditional investments. For decades, the retirement plan world has played it safe. Stocks, bonds, and cash ruled the day, largely because anything outside that box felt like an invitation to litigation. Illiquidity, valuation challenges, and participant understanding have always made alternatives a tough sell.

Now the government appears to be signaling that modernization is on the table. The proposed rule has been sent to the Office of Management and Budget, which means the formal review process has begun. The text isn’t public yet, but once it is, there will be a comment period where industry stakeholders can weigh in. That alone tells you this isn’t theoretical. This is moving.

The big question is what the final rule will actually say. Will it provide clearer standards for fiduciaries? Will it offer any comfort that private equity, real estate, infrastructure, or even digital assets can be used prudently in defined contribution plans? Or will it simply restate existing fiduciary principles with a new label slapped on the cover?

What’s clear is that the industry is changing whether regulators like it or not. Providers are pushing alternatives. Sponsors are curious. Participants are asking for diversification beyond the traditional menu. The DOL now has a chance to either bring clarity or add another layer of uncertainty.

Innovation is fine. But under ERISA, process still matters more than novelty. This proposal could be a turning point—or just another rule that looks important until the first lawsuit tests it. Either way, fiduciaries would be wise to pay attention.

If someone had told me 15 years ago that one of the world’s largest alternative asset managers would be partnering with a mainstream retirement plan provider to bring private market investments into 401(k) plans, I would have assumed they were confusing a pension plan with a hedge fund cocktail party. Yet here we are.

Empower has announced a new partnership with Blackstone, adding private equity, private credit, real estate, and infrastructure strategies to its defined contribution platform. This is not a fringe experiment. This is a serious push to make institutional-style investing available to everyday retirement savers, delivered through collective investment trusts and primarily accessed via managed accounts and advice-based models.

This move didn’t come out of nowhere. Over the past year, Empower has been building a private markets lineup with some of the biggest names in asset management. Blackstone’s entrance adds scale, brand recognition, and credibility to the effort. When a trillion-dollar asset manager steps into the 401(k) space, it’s no longer a theoretical conversation about “someday.” It’s a statement about where the industry thinks retirement investing is heading.

That said, this isn’t about replacing target-date funds or turning participants into day traders of illiquid assets. The pitch is diversification—giving long-term investors exposure beyond public stocks and bonds in a controlled, professionally managed way. Done correctly, that can make sense. Done poorly, it can become a fiduciary headache.

Plan sponsors and advisors should be asking hard questions. How do fees compare? How is liquidity managed? What happens in market stress? How is participant suitability determined? And perhaps most importantly, how do you document fiduciary prudence when offering strategies that most participants have never heard of and don’t fully understand?

Private markets in defined contribution plans are no longer a hypothetical future. They’re here. Whether this becomes a meaningful evolution in retirement investing or an option that only a small percentage of participants ever use will depend on execution, education, and fiduciary discipline.

This isn’t a joke. But it is a turning point worth paying attention to.

For years, forfeitures were treated like found money in 401(k) plans. Someone leaves before vesting, the plan keeps the unvested employer contribution, and no one loses sleep.

Then came the lawsuits.

Plaintiffs have begun challenging how forfeitures are used—particularly when they’re applied to offset employer contributions instead of paying plan expenses. Suddenly, something that felt routine is being reframed as a fiduciary breach.

Here’s the reality: forfeitures are not inherently bad. ERISA permits them. The IRS permits them. Most plans are designed to use them. But how you use them—and how well your plan documents support that use—matters.

The fiduciary risk isn’t in having forfeitures. It’s in:

· Ignoring plan language

· Failing to apply forfeitures consistently

· Letting forfeitures accumulate without a clear purpose

· Never revisiting the decision

If forfeitures reduce employer contributions, sponsors should be prepared to explain why that approach makes sense for participants and the plan as a whole. If they pay expenses, sponsors should ensure that’s clearly authorized and properly documented.

This isn’t about panic. It’s about attention.

Forfeitures are a perfect example of an ERISA truth: permitted does not mean protected. Protection comes from clarity, consistency, and documentation.

In today’s litigation environment, anything that quietly benefits the employer deserves a second look—not because it’s wrong, but because it needs to be defensible.

Free money has strings attached. Fiduciaries ignore them at their peril.

When a 401(k) lawsuit is filed, the first thing plaintiffs’ counsel asks for isn’t your investment returns. It’s your committee minutes.

That surprises plan sponsors. It shouldn’t.

ERISA litigation is less about outcomes and more about process. Committee minutes are the written record of that process—or the written proof that there wasn’t one.

Good minutes don’t need to be novels. But they do need to show:

· What issues were discussed

· What information was reviewed

· What questions were asked

· What decisions were made—and why

Bad minutes are worse than no minutes. I’ve seen minutes that say things like “fees reviewed and approved” with no context, no benchmarking, and no discussion. That’s not protection—that’s an invitation.

The goal isn’t to script perfection. It’s to document engagement. Courts understand fiduciaries aren’t infallible. What they won’t forgive is rubber-stamping.

Here’s what strong minutes avoid:

· Jokes

· Casual language

· Statements suggesting decisions were predetermined

· Overreliance on providers without discussion

And here’s what they emphasize:

· Independent thinking

· Follow-up questions

· Conflicts disclosed and addressed

· Decisions revisited over time

Think of committee minutes as your future self’s best friend. Years later, when memories fade and personnel changes, those minutes may be the only evidence that fiduciaries took their role seriously.

Under ERISA, silence isn’t neutral. It’s suspicious.

One of the most dangerous phrases in the 401(k) world isn’t “lawsuit” or “DOL audit.” It’s: “Everyone does it this way.”

I hear it all the time from plan sponsors. Everyone uses revenue sharing. Everyone uses forfeitures to offset employer contributions. Everyone has the same default investment lineup. And yes—many of those practices may be permitted. But ERISA doesn’t ask whether something is common. It asks whether it’s prudent.

Fiduciary duty is not a popularity contest. Courts don’t care how many other plans do the same thing you do. They care whether your fiduciaries engaged in a thoughtful process, understood the impact on participants, and made a reasoned decision based on facts—not habit.

That’s why “everyone does it” has become such a weak defense in recent litigation. Plaintiffs’ lawyers love industry norms, because norms often hide complacency. And complacency is kryptonite under ERISA.

If your plan uses a common practice, ask the uncomfortable questions:

· Why does this plan do it this way?

· Who benefits?

· What alternatives were considered?

· When was the decision last reviewed?

The goal isn’t to be different for the sake of being different. It’s to be deliberate. Fiduciary best practices come from process, not tradition.

In the retirement plan world, comfort is often the enemy of compliance. If you’re relying on the idea that “no one ever gets sued for this,” you’re already thinking about fiduciary duty the wrong way.

Every few years, someone declares revenue sharing “dead.” And every few years, it stubbornly survives. Revenue sharing is still legal. It’s still widely used. And yes, it’s still dangerous—especially for plan providers who don’t explain it well.

The risk isn’t revenue sharing itself. The risk is how casually it’s treated.

Providers often assume that if revenue sharing is disclosed, the job is done. It’s not. Disclosure doesn’t equal understanding, and understanding doesn’t equal prudence. Plaintiffs know this, which is why revenue sharing keeps showing up in complaints.

Here’s where providers get into trouble: they fail to help sponsors understand the tradeoffs. Revenue sharing can reduce explicit fees, but it can also distort investment selection, obscure true costs, and create cross-subsidies between participants. None of that is inherently illegal—but all of it needs to be considered.

A provider who presents revenue sharing as the easy option without discussing alternatives is doing their client—and themselves—no favors. Courts expect fiduciaries to evaluate fee structures. When providers gloss over that evaluation, they become part of the story.

The smarter approach is transparency with context. Explain what revenue sharing does, what it costs, who benefits, and what other options exist. Then document that conversation.

Revenue sharing isn’t a villain. But it’s not harmless either. Providers who treat it casually risk being seen as facilitators instead of advisors.

And in ERISA litigation, that’s a dangerous place to be.