The Rosenbaum Law Firm P.C. Blog

There’s nothing wrong with “free” — unless there’s a hidden cost lurking beneath the surface. Small business plans that don’t require filing a Form 5500 might sound great on paper, but when you look closer, you realize the real cost is in what you’re missing out on for your retirement savings.

Take SEPs, for example. They’re a decent option, sure, but there’s no opportunity for salary deferrals. And you have to contribute the same percentage for every eligible employee — no special treatment for yourself as an owner.

Simple IRAs are nice, too, but the deferral limits are a lot lower than a 401(k), and again, contributions must be made pro-rata. That means no allocating bigger chunks to yourself while giving less to your employees.

A solo 401(k) is a great tool if you’re a one-person show — but it becomes obsolete the moment you hire that first employee.

Bottom line: whatever your situation, you’re doing yourself a disservice if you don’t explore all the retirement plan options out there. Find what really fits your business and your goals, because the cheapest or easiest plan might not be the best plan for you.

Retirement plan participation is up, but don’t pop the champagne just yet. According to Morgan Stanley at Work’s just-released State of the Workplace Report, while more employees are enrolling in their 401(k) plans, many are also slamming the brakes on contributions. Why? Economic uncertainty, inflation fears, and that ever-familiar panic over whether the recession is around the corner or already here.

Participation in 401(k) plans held steady at a solid 86%—that’s the good news. The bad news? A growing number of participants are cutting back on how much they contribute. Nearly 4 in 10 employees say they’re pulling back due to concerns about inflation or recession. For Gen Z workers, it’s nearly 1 in 2. Think about that for a second—half of the youngest generation in the workforce is already too stressed to invest in their future.

Even more troubling, 67% of employees say they’re reducing savings across all accounts. Not just the 401(k), but their emergency funds, IRAs, and likely whatever they squirreled away in a coffee can during COVID.

This all paints a picture we’ve seen before: when the economy gets shaky, employees want support—and not just in the form of a cute enrollment brochure and a company match. They want real help: access to financial advisors, goal-based planning, and income strategies that don’t require a PhD in economics to understand.

And guess what? HR gets it. The same Morgan Stanley report shows that HR leaders also rank access to advisors, goals-based planning, and income solutions as their top three needs. So both employees and employers are speaking the same language for once—now they just need to act on it.

Once upon a time, offering financial wellness tools and advisory access was seen as fluff—something extra you used to pad your benefits page. That time is over. According to this survey, 69% of HR execs say retirement planning help is a top priority for attracting talent. Among employees who actually use their benefits, that number climbs to 82%.

And it makes sense. If someone’s struggling to decide whether to make their student loan payment or max out their Roth contribution, the company that helps them figure it out will win their loyalty. The company that says “call the fund company” won’t.

So yes, participation is up. But contributions are down. And employees are anxious. That’s the story of retirement right now. If you’re a plan sponsor, advisor, or TPA, the takeaway is simple: your participants need more than just access—they need answers. And if you give them those answers, you’ll not only help them retire with dignity—you’ll probably keep them around a lot longer too.

The Department of Labor just announced that its Employee Benefits Security Administration (EBSA) is giving its opinion letter program a much-needed facelift. For those of us who’ve been around the retirement plan block a few times, this is welcome news—because clarity is hard to come by when navigating the bureaucratic jungle of ERISA and federal regulations.

On June 2, the DOL rolled out changes across multiple agencies as part of its push to better support compliance and make enforcement a little less like reading hieroglyphics without a Rosetta Stone. As part of this initiative, they’ve launched a new web page that makes it easier to browse past letters and request new ones. In a world where the wrong interpretation can land you in hot water with a class action lawsuit or a DOL investigation, a clear and official opinion is worth its weight in gold.

As Deputy Secretary of Labor Keith Sonderling put it, “Opinion letters are an important tool in ensuring workers and businesses alike have access to clear, practical guidance.” I don’t often agree with DOL press releases, but he’s not wrong.

What’s New?

The DOL’s modernization effort spans several agencies, not just EBSA. The Wage and Hour Division, VETS, OSHA, and MSHA are all in on the action. But for those of us in the ERISA world, the EBSA’s part of the upgrade is what matters most.

EBSA issues two kinds of letters:

· Advisory Opinions – These apply the law to specific facts. Think Advisory Opinion 2023-01A, where EBSA weighed in on Citigroup’s commitment to cover investment management fees in certain plans.

· Information Letters – These don’t apply the law to a particular situation, but clarify how the DOL interprets well-established legal principles. Example: the SECURE Act and bonding requirements for PEPs in Information Letter 2022-09-07.

The DOL is encouraging the public to submit requests, and if you’re a plan sponsor, attorney, TPA, or advisor dealing with a gray area, this is a tool you should have in your compliance toolbox.

How to Request an Opinion Letter (and Not Screw It Up)

Anyone can submit a request — employers, employees, consultants, even lawyers who are brave enough to admit they don’t know everything. But you’ll need to come prepared:

· Include the laws or regulations at issue.

· Lay out the facts — accurately and completely.

· Confirm that the issue isn’t currently being litigated or investigated.

· And yes, give them a phone number (welcome to 1996).

But here’s the fine print: don’t include confidential or sensitive info. The DOL may post their response publicly. So unless you want your plan’s dirty laundry hanging on a .gov site, keep it clean.

Also, don’t bother using this process to try and weasel out of a problem you’re already knee-deep in. If there’s a current investigation or lawsuit, the DOL won’t touch your request.

Why It Matters

For years, I’ve said that one of the biggest risks in the retirement plan space isn’t bad actors — it’s confused actors. The DOL’s guidance has been inconsistent, hard to find, and often outdated. This upgrade to the opinion letter program is a step in the right direction.

But let’s be clear: this is still government. “Modernization” is relative. The website might be easier to navigate, and the letters more accessible, but this won’t magically make ERISA any less complex or the DOL any faster to respond.

Still, it’s a useful move. In an age of excessive fee lawsuits, plan design scrutiny, and complex regulatory changes (looking at you, SECURE 2.0), having a place to ask the DOL, “Can I do this?” and maybe get a straight answer is a win.

At the end of the day, a well-timed opinion letter can be the difference between a prudent fiduciary and a defendant in federal court.

Fidelity just dropped their Q1 2025 retirement analysis, and while average balances for 401(k), 403(b), and IRAs dipped slightly due to market volatility, there’s some good news buried under the market noise: participants didn’t panic. Contribution rates remained strong, with the total 401(k) savings rate hitting a record 14.3%, and 403(b) plans holding steady at 11.8%.

Behind the glossy numbers and upbeat quotes, there are real takeaways. The market will always swing. It’s how participants — and more importantly, fiduciaries — respond that makes the difference. Staying the course on contributions? Great. But we still have to ask: are fees reasonable? Are fund options prudent? Are participants being educated and supported in volatile times?

The report highlights that most participants didn’t veer off course in Q1 — and that’s worth acknowledging. But let’s not pat ourselves on the back too hard. A high savings rate is just one part of the equation. Without strong plan design, effective education, and diligent fiduciary oversight, savings can be undercut by high fees, poor investments, or neglect.

As always, plan sponsors have a duty — not just to check the box, but to constantly evaluate whether their plan is truly working for participants. Market swings are inevitable. Fiduciary responsibility isn’t.

If you’re a plan sponsor, the message is clear — keep your eyes on participant outcomes, not just account balances.

Here’s that in Ary Rosenbaum’s voice — clear, direct, with a personal anecdote to drive the point home:

I’ve talked a lot about institutional share classes, revenue sharing, and the alphabet soup of fund share classes. Maybe I was getting too technical — ERISAese, if you will. So let me break it down in plain English.

No matter what it’s called — institutional, admiral, or some fancy alphabet soup designation — the plan sponsor’s job is straightforward: find the least expensive share class of a mutual fund that’s available to the plan. That’s it. Plain and simple. If they pick a higher-cost share class when a cheaper one is available, they’re just asking for trouble. Someone will come knocking, accusing them of breaching their duty of prudence. And rightly so.

It reminds me of a story about my cousin. Her father was wealthy because he owned a hat manufacturing business. We both had Apple II computers back in the day. She bought her copy of Print Shop at the local computer store for $60. I bought the same product by mail order for $32. Same software. The fact that her father overpaid was his problem — it was his money.

A plan sponsor can’t say the same thing. Overpaying with the participants’ money is a breach of fiduciary duty. When you’re a plan fiduciary, every penny counts — not for you, but for the people whose retirement you’re entrusted to protect. No excuses.

Absolutely. Here’s your piece in the voice of Ary Rosenbaum—refined for tone, rhythm, and clarity while keeping the conversational, legal-insider style you’re known for.

When I was in law school, I was the editor of the student magazine. One semester, I broke a story about a scandal at one of the law journals. The editor-in-chief of that journal—who didn’t appreciate the spotlight—handed me a letter from her attorney. It asked for my sources, who I talked to, what I knew, and everything but my name, rank, and serial number. It was the first time I was ever threatened with a lawsuit, and I’ll be honest: I was hyperventilating.

Then I looked down at my desk and noticed something interesting—the work number for this editor-in-chief was the same number listed for her attorney. Turns out, this “attorney” was someone who practiced international law, not libel. That taught me two things very quickly: First, people will weaponize the appearance of legal muscle even when there’s no bite behind the bark. Second, a lawyer’s letter is often more about pressure than position.

Fast-forward to today: I write an annual article (except, notably, the 16th annual edition this June) about payroll providers and third-party administrators. More than once, I’ve been threatened with litigation over it. Clients, non-clients, industry players—they all seem to have a lawyer on speed dial when the truth gets a little too uncomfortable.

Sometimes these threats are real—especially when there’s actual liability exposure. But most of the time, it’s a tactic, a scare move meant to get you to back off or shut up. When I got that letter in law school, I gave it to the Dean. His advice? “Settle immediately.” That was lousy advice. Here’s better: when you get a letter from a lawyer, speak to a lawyer. A good one will help you figure out if it’s a bluff or a bomb.

I get it—lawyers are expensive. Except me. But the worst mistake you can make is thinking you can handle a legal threat on your own.

A lawyer letter is like a hand in poker—sometimes it’s a bluff, sometimes it’s four aces. You need someone who knows how to read the table and tell you what’s real. If you get one of those letters, you know where to find me.

Well, that didn’t take long.

In what’s becoming a routine political tug-of-war, the Trump administration (yes, back again) has rescinded the Biden-era Department of Labor (DOL) guidance cautioning plan sponsors against offering cryptocurrency in 401(k) plans. To quote every compliance officer I’ve ever met: here we go again.

Now let me be clear—I love crypto. I believe in decentralization, innovation, and financial technology that isn’t stuck in the Stone Age of paper checks and fax machines. I think crypto has a role to play in the future of retirement planning. But like any shiny new object in the retirement space, it needs to be handled with a mix of curiosity, caution, and common sense.

Just because the DOL has backed off doesn’t mean you should go rushing to throw Bitcoin into your investment lineup like it’s a Target Date Fund. Fiduciary responsibility doesn’t vanish with a policy shift. ERISA didn’t change overnight.

If I were ever to offer crypto in a 401(k)—and I’m not saying I would, just if—I certainly wouldn’t do it through some fly-by-night crypto wallet company that promises the moon, charges you the stars, and stores your coins on a server in someone’s basement. No, I’d use a trusted custodian—someone with experience, infrastructure, insurance, and a track record of not disappearing when the market tanks.

Because let’s not forget: plan sponsors have a duty of prudence. That means understanding what you’re offering, why you’re offering it, and how it fits into the larger plan structure. Offering crypto in a plan isn’t inherently imprudent—but doing it with the wrong partner absolutely is.

So while the political pendulum swings, let’s remember our job hasn’t changed. We’re still here to protect participants, build smart plans, and avoid ending up as the cautionary tale at the next ASPPA conference.

Stay curious. Stay cautious. And please—if you’re going to offer crypto in a 401(k), don’t let a Reddit thread be your due diligence.

There are few things more maddening, more viscerally frustrating, than watching a plan sponsor or service provider steer themselves into the abyss out of sheer pride or ignorance—or worse, some toxic blend of both. But in the twilight centuries of the 5500s, nothing tested my patience quite like the decision not to use the DFVCP.

Let me be clear: the Department of Labor’s Delinquent Filer Voluntary Compliance Program (DFVCP) is a gift. A golden parachute for those who stumble, an amnesty for the well-intentioned but disorganized. It’s not just a program—it’s a lifeline. And yet, somehow, year after year, I would encounter plan sponsors—employers, trustees, alleged fiduciaries—who chose not to grab hold.

You’d sit across from them, the ink on the late Form 5500s still drying, and you’d explain it calmly, like you’re talking to someone dangling from a ledge. “You’re late. You’ve missed a required filing. But if you act now, if you enter the DFVCP voluntarily, the penalty is capped. You control the narrative. You retain dignity.”

And still, the response: “Let’s wait. Let’s see if the DOL notices.”

The DOL always notices.

It was maddening because it wasn’t just about money, though the penalties outside DFVCP could be catastrophic. It was about mindset. The DFVCP was built on a principle I respect deeply—redemption. A structured way to admit a mistake, make amends, and move forward without getting devoured by the very system designed to ensure compliance.

But so many couldn’t see it. Maybe they’d been taught that compliance was an adversarial game, that if you admitted fault you invited disaster. Maybe they were emboldened by years of evasion. Or maybe, and this is the one that made me want to scream into my coffee mug, they just didn’t want to pay anything.

So they’d roll the dice. Ignore my counsel. Decline DFVCP. And inevitably, months later, I’d get the call, their voice hushed and panicked:

“We just got a letter from the DOL.”

And I’d take a breath. Not to stay calm—I was calm. But to keep from saying, “I told you so.”

You don’t get points for pride in ERISA. You get penalties.

In those late years, as the industry automated and compliance tools became smarter, I often wondered why we still needed to have this conversation. Why, even with the ghosts of civil penalties looming large, people still believed they could outmaneuver time and regulation.

But then again, maybe that’s the curse of my profession—the long war between logic and hubris.

And in that war, the DFVCP was one of our few truces.

Refusing it? That was the madness.

Two years ago, a guy named Handy tried to do something that should be dead simple in 2025: roll over his $114,000 401(k) after changing jobs. He was 33, building toward his future. But instead of a clean, secure digital transfer, Paychex sent him—wait for it—paper checks.

And then the real disaster struck: those checks were intercepted and fraudulently cashed. That $114,000? Gone. Just like that. Now Handy’s stuck in federal court, chasing down money that was supposed to carry him into retirement.

And here’s the kicker: no one even told him a digital transfer was an option.

Let that sink in.

This Shouldn’t Still Be Happening

Paychex is not some back-office operation with a fax machine and a dusty Rolodex. They’re one of the biggest payroll and retirement administrators in the country. But Handy’s story highlights what I’ve been shouting from rooftops for years: too much of the retirement industry is still stuck in the 1990s.

According to a 2024 Capitalize survey, 43% of 401(k) rollovers still involve physical checks. That’s almost half the market. And more than 80% of savers say the process should be as simple as sending a bank wire.

Instead, they get phone trees, hold music, weeks of waiting, and checks that can vanish into thin air.

Why Are We Still Using Paper Checks?

It boils down to three things: legacy systems, regulatory inertia, and a stunning lack of urgency from some plan providers.

The systems that run many retirement plans were designed decades ago. Updating them means time, money, and effort—things some providers aren’t exactly eager to spend if the Department of Labor isn’t forcing them to. So they do the bare minimum. And savers pay the price.

In Handy’s case, that price was six figures.

Paper Checks Are a Gift to Criminals

This isn’t theoretical. Paper-based rollovers expose people to:

• Fraud and theft: Checks can be intercepted, altered, or forged with shocking ease. It happens all the time.

• Delays and frustration: Mailed checks get lost or delayed. Some rollovers take months—Capitalized found that 42% took longer than two months.

• Zero transparency: Good luck getting real-time updates or tracking a check that’s already disappeared into the system.

Worse still, protections like ERISA, while useful, are limited. If your check gets stolen and cashed, you may be stuck in a legal no-man’s-land between your old provider, your bank, and the receiving custodian. Meanwhile, your retirement sits in limbo.

Here’s How You Protect Yourself

If you’re rolling over a 401(k), treat it like you’re moving a briefcase full of cash across state lines—because in some ways, you are. Here’s how to stay safe:

• Demand a direct transfer. Don’t settle for a check. Push your provider to wire the money straight into your IRA or new 401(k). It’s secure and traceable.

• Hire the right help. Work with a Certified Financial Planner™, not a buddy with a business card. You want someone bound by fiduciary duty, not commission checks.

• Track everything. If you’re forced to accept a check, send it by certified mail and keep every receipt. If anything goes sideways, documentation is your best friend.

• Watch your accounts. Fraud doesn’t always come with fireworks. Check your statements regularly and report anything suspicious ASAP.

• Stay ahead of scams. From fake self-directed IRAs to shady rollover “services,” there’s no shortage of traps out there. Education is your best defense.

Your Money Deserves Better

Retirement savings should not be vulnerable to outdated processes and broken systems. Handy’s case is tragic—but it’s not unique. I’ve seen this story play out too many times. Until the industry catches up with the 21st century, it’s on savers to be their own first line of defense.

Your future deserves more than a check in the mail. It deserves security, clarity, and accountability. And if your provider can’t offer that? Find one that can.

Here’s the short version: the Department of Labor’s decision to reopen the Biden-era ESG rule is overdue—and welcome.

Yes, Judge Kacsmaryk blessed the 2022 regulation under the new post-Loper Bright world, but legal survivability is hardly the same thing as sound policy. The rule’s core flaw is philosophical, not procedural: it invites fiduciaries to sprinkle non-pecuniary dust onto investment decisions that should be grounded, full stop, in dollars and risk-adjusted return. ESG may be fashionable cocktail-party talk, but retirement plans are neither hedge funds for social experiments nor slush funds for political goals. They exist to replace paychecks, not to save the planet or re-engineer boardrooms.

That’s why the attorneys general filed suit in January 2023. It wasn’t grandstanding; it was recognition that the rule muddies the clean line ERISA has always drawn: undivided loyalty to pecuniary benefit. Every time regulators imply “Sure, go ahead and weigh climate metrics if you feel they matter,” they push fiduciaries toward situations where proving pure pecuniary intent becomes a discovery nightmare. Litigation risk skyrockets, participant trust erodes, and plan committees start behaving like nervous cats—terrified of stepping on the wrong political land mine.

The ESG crowd insists “material factors” like climate risk are simply another lens for measuring value. Maybe. But a fiduciary already has license—indeed, a duty—to consider any factor demonstrably linked to return. We don’t need an acronym to do that. What the 2022 rule really did was give cover for mission-driven screens and shareholder campaigns that, more often than not, have indeterminate or negative value in a diversified portfolio. Ask ten asset managers for an ESG score, get twelve different answers and a higher fee schedule. Participants get the bill.

So, credit where it’s due: the Trump DOL’s decision to initiate notice-and-comment and potentially restore the 2020 rule signals a return to clarity. Tell fiduciaries: price the risk, prove the math, and leave the politics to Congress. If a climate metric, a diversity statistic, or a governance ratio truly moves the valuation needle, bake it into your cash-flow model like you would any other risk driver—no ESG halo required.

Will the new proposal fix every ambiguity? Probably not. But at least we can start from a place where fiduciary duty isn’t stretched to accommodate every social crusade with a PowerPoint deck and a marketing budget.