The Rosenbaum Law Firm P.C. Blog

Every once in a while, the data tells a story that plan sponsors should actually feel good about. Vanguard’s latest How America Saves report offers just that, a story of progress. Thanks to smarter plan design choices, participants are saving more, engaging better, and showing greater retirement resilience.

And it’s not by accident. It’s by design.

What the Numbers Show

The report looks at nearly five million participants and the findings are hard to ignore:

· 76% of plans now offer immediate eligibility to contribute.

· 61% of auto-enrollment plans default at 4% or higher, nudging people to save more from day one.

· Roth contributions are climbing, with 18% of participants using Roth and 86% of plans offering it.

· 67% of participants are fully invested in a managed solution, like a target-date fund or managed account.

· 45% of participants increased their savings rate last year, pushing both deferral rates and overall plan savings to new highs.

These aren’t just statistics, they’re proof that modern 401(k) plan features are working.

Why It Matters to You

Plan sponsors sometimes view plan design as just a box-checking exercise. But in reality, smart design reduces fiduciary risk and helps employees build better futures.

When participants save more automatically, when they’re defaulted into professional management, and when they’re given access to both pre-tax and Roth options—they win. And when participants win, plan sponsors win too.

Better participant outcomes mean less exposure to litigation, fewer complaints, and a stronger defense if fiduciary processes are ever challenged.

What You Should Be Doing

1. Check Your Auto Features If you’re not using automatic enrollment, or you’re defaulting participants at 3% or lower, you’re missing an opportunity. Higher default rates don’t cause opt-outs; they lead to better savings.

2. Review Roth Availability More participants are asking about Roth contributions, and tax diversification is

becoming part of the retirement planning conversation. If you’re not offering Roth, you’re behind.

3. Reassess Your Default Investments With two-thirds of participants using managed solutions, target-date funds should be the qualified default investment alternative (QDIA) in most cases. That’s not just good practice, it’s good protection.

4. Track Participant Behavior Don’t just install good features. Measure whether they’re being used. Are deferral rates increasing year to year? Are more participants engaging with Roth? That’s fiduciary gold when you need to show your process works.

Final Thought

What this data tells us is simple: plan design isn’t just about structure, it’s about impact. Small decisions like setting a default rate or enabling Roth deferrals have real, measurable effects on people’s retirement outcomes.

We don’t often get a pat on the back in this business, but this is one of those times. If you’ve built a plan that pushes employees to save better, you’re doing your job. Keep it up, and keep improving.

Forfeitures have long been a sleepy corner of 401(k) plan administration, but recent class-action lawsuits are waking everyone up.

Over the past couple of years, plaintiffs’ attorneys have set their sights on how plan sponsors use forfeitures, those leftover funds from employer contributions that aren’t vested when employees leave early. Many plans, following long-standing IRS guidance, use forfeitures to offset future employer contributions. That’s been standard operating procedure. But now, some lawsuits claim that doing so may violate ERISA’s fiduciary standards.

Whether these cases succeed remains to be seen. But if you’re a plan sponsor or fiduciary, now is the time to get your house in order.

The Basics: What Are Forfeitures?

When an employee leaves before employer contributions are fully vested, the non-vested portion is forfeited. ERISA says those forfeitures can’t go back to the employer. The IRS has long said forfeitures may be used to:

· Reduce future employer contributions,

· Pay plan expenses, or

· Provide extra benefits to participants.

In 2023, the IRS proposed rules confirming this—and adding that forfeitures must be used no later than 12 months after the end of the plan year in which they occur.

So far, so good.

The New Legal Theory

Here’s where the litigation flips the script: Plaintiffs argue that using forfeitures to offset employer contributions benefits the company, not plan participants, and therefore violates the fiduciary duty to act “solely in the interest” of participants. They claim that plan sponsors should be using forfeitures to reduce fees borne by participants first, not employer costs.

Some courts have dismissed these claims, others are letting them proceed. And in the post-Loper Bright world, where courts are no longer required to defer to federal agencies’ interpretations of statutes, the long-held IRS guidance may not carry the weight it once did.

What Should You Do?

1. Review Your Plan Document. Make sure the way your plan uses forfeitures is spelled out clearly—and that you’re following it. If your plan document gives discretion to fiduciaries, that can be a litigation risk.

2. Consider Removing Discretion. The more discretion fiduciaries have, the more second-guessing plaintiffs can do. You may want to amend your plan to say forfeitures shall be used in a specific way—like paying expenses first, then reducing employer contributions.

3. Document Your Process. If you’re applying forfeitures correctly and in line with the plan document, write it down. Keep a record. If you ever face scrutiny, documentation will be your best defense.

The Bottom Line

This may seem like an attack on long-standing practice—but it’s more about litigation strategy than legal clarity. Still, plan sponsors can’t ignore it. As always, the safest path is to follow the plan, eliminate ambiguity, and document everything.

It’s one more reminder that in ERISA, even the smallest buckets of money come with big responsibilities.

When I was getting ready for law school, I watched The Firm. Tom Cruise, fresh-faced and full of promise, with all these big-name law firms throwing money at him like he was a first-round draft pick. A Mercedes. A Rolex. A house. All for signing on the dotted line. Of course, he picked the mob firm in Memphis, but that’s beside the point. I wasn’t dreaming of mob ties, I was dreaming of being wanted.

I thought, maybe they’ll throw money at me too. Spoiler alert: they didn’t.

Instead of Harvard or Yale, I went to American University Washington College of Law. A third-rate law school in a two-law school town. And when I graduated, after adding a cherry on top with an LL.M., no Mercedes was waiting for me. No Rolex. Just a job at a third-party administration (TPA) firm and a Toyota Camry. Starting salary? $35,000. Tom Cruise probably made that every time he blinked.

I spent nine years grinding at two TPA firms, learning the retirement business inside and out. Eventually, I thought it was time to try the law firm path. First stop: a union-side firm where they treated associates the way they thought the employers treated union members, badly. Then came a fakakta Long Island law firm. I stayed for two years, working hard, doing what I thought was the path to success.

That’s when I saw it. The “path to partnership” was a mirage. The first level of “partner” had no vote. No say. Just a different title and maybe a better parking spot. It was like a country club with two entrances, and I didn’t have the key to the one with power.

Worse than the structure was how I was treated. Like a necessary inconvenience. I realized I was never going to be that guy. The law firm golden boy, shaking hands at bar association events, billing hours like it was a religion, kissing the right rings, waiting 10 years to maybe become “non-equity partner.”

I was getting older. The longer I stayed, the more I felt like I was cosplaying a lawyer instead of living like one.

So I jumped. I started my own firm. No partners. No gatekeepers. No fake ladders. Just me, clients who needed help, and the belief that I could do it better. I wasn’t trying to win a corner office, I wanted to build something real. And I did.

Years later, I met Drew Brees and asked him about the Chargers giving up on him early in his career. He just smiled and said, “It all worked out in the end.” That stuck with me.

Because it did. It did all work out. I was never going to be that guy, and thank God for that.

If you’re a plan provider—advisor, TPA, recordkeeper, or pooled plan provider—you’ve probably heard the advice a million times: “Create content to stay top of mind with plan sponsors.” But what kind of content actually works?

Here’s the secret: plan sponsors don’t want white papers on mortality assumptions. They want practical, readable, “what do I do now?” kind of stuff.

Here are five types of content you should be producing:

1. The “Are We Doing This Right?” Checklist Give sponsors a simple, jargon-free checklist they can use to evaluate their own plan. Think: Are we benchmarking fees? Do we meet regularly? Are we documenting decisions? It’s actionable, digestible, and it positions you as a helpful resource.

2. Short Videos or Posts on Fiduciary Duties Sponsors live in fear of doing the wrong thing. Short videos or posts explaining things like “What’s a QDIA?” or “What happens if we miss a deposit deadline?” are gold. Keep it short, human, and useful.

3. Quarterly “What’s New in 401(k)” Updates A quick email or PDF recapping regulatory changes, key court cases, and compliance reminders. Be the one who helps them avoid a mistake before it becomes an issue.

4. Case Studies Share anonymized stories of plans you’ve helped—especially if you’ve improved investment lineups, reduced fees, or streamlined administration. Everyone loves before-and-after stories.

5. Participant-Facing Tools They Can Share Sponsors love content they can pass along to employees. Provide short explainers, calculators, or videos on saving more, Roth vs. pretax, or how to read a statement. You help them look good to their employees.

Bottom line: plan sponsors are busy, confused, and terrified of doing something wrong. Your content should solve problems, reduce fear, and make you the provider they trust to keep them out of trouble.

I once volunteered for an organization where I flat-out said the leadership—excluding myself—was stuck in 1986. I didn’t say it to be funny. I said it because it was true.

They were using the same dated tactics to bring in members and raise money that may have worked when Family Ties was a top-rated show, but not in today’s world. They were clinging to old models like they were gospel, completely missing the reality that people, and how you reach them, have changed.

And it wasn’t just that organization. I worked at a law firm where the culture and marketing mindset felt fossilized. I tried using social media to talk about retirement plan issues, start conversations, build credibility, the kind of things that actually bring in clients. The managing attorney looked at me like I had three heads. Meanwhile, her husband, also an attorney, was out there doing the same thing and doing it well. But instead of learning from that, she treated it like something shameful. God forbid a lawyer actually markets their services in a way that connects with the present.

Here’s the thing: this business changes. Retirement plan rules evolve. Plan sponsors change how they hire providers. The way we communicate, the way we demonstrate value, the way we build trust—it’s all different than it was decades ago. And it keeps changing.

You can’t keep marketing like it’s a fax machine world when everyone’s glued to their phones. You can’t wait around for referrals like you’re reading from a Rolodex. If you want to grow, you need to evolve. Learn new platforms. Try new strategies. Stay relevant.

This isn’t about chasing every trend or jumping on every buzzword. It’s about having the humility to recognize that you can’t coast on what worked 30 years ago. Relevance is earned every day. And if you don’t make the effort to stay current, someone else will, and they’ll eat your lunch while you’re still printing tri-fold brochures.

Success today requires flexibility, curiosity, and a willingness to challenge your own assumptions. If you’re in this business—any business, and still think your ’86 playbook is going to win today’s game, I’ve got news for you: the rules have changed.

And yes, the best thing about 1986 was still the New York Mets. But unlike some people I’ve worked with, at least the Mets have tried to evolve.

Vanguard’s latest report makes a blunt point: allowing collective investment trusts (CITs) in 403(b) plans could save the median plan participant about 0.08% to 0.09% annually compared to mutual fund fees—translating into $23,000–$28,000 less paid in fees by age 65 for someone earning $74,000 a year. That’s enough to cover six months of living expenses in retirement for one person.

Here’s the kicker: 10 million educators, healthcare workers, and nonprofit employees are left behind by plan regulations barring CIT access in most 403(b)s. Meanwhile, their private-sector counterparts in 401(k) plans enjoy lower-cost, institutional-tier investment options.

Why It Matters—and Fast

CITs aren’t gimmicks. They’re institutional investment vehicles regulated by OCC and state banking authorities, not the SEC—so they sidestep much of the retail marketing and disclosure regime. That makes CITs cheaper to run and easier to customize for large plan groups.

Since August 2024, CITs have even surpassed mutual funds in target-date fund assets. Yet many 403(b) plans remain frozen in time. This isn’t a small oversight—it’s a systemic inequity that costs participants real dollars over decades.

Legislative Progress—but Still No Access

The SECURE 2.0 Act tweaked tax law to permit CITs in 403(b)s, but securities law wasn’t updated, so most plans still can’t offer them. Recently, legislation—H.R. 1013, the Retirement Fairness for Charities and Educational Institutions Act—advanced from committee on a bipartisan 43–8 vote to bridge that gap.

One proposed amendment to restrict CITs only to ERISA-covered 403(b)s was defeated. That means potential access expands—not contracts—and that’s vital because ERISA fiduciary standards apply regardless of plan tax status .

Fiduciaries, Don’t Sleep on This

If you oversee a 403(b) plan today, you have options—but you still can’t offer CITs until the law changes. That means it’s incumbent on plan sponsors and advisors to engage lawmakers and support reform—both for compliance and participant benefit.

Even small fee differences can compound into substantial retirement savings. The longer this disparity persists, the more nonprofit workers pay—and the more they lose out on potential compounding. That’s not accidental—it’s a fiduciary blind spot worth fixing.

Bottom Line

This is not theory. It’s not a cost-savings calculator exercise. It’s real dollars that could be preserved for teachers, nurses, public school employees, and nonprofit staff for decades to come. If you’re serious about fiduciary duty—not just compliance—you need to be part of the solution.

Because when a quarter-percent difference translates into six months of income in retirement, it’s not small—it’s meaningful. And waiting is not an option.

A massive new study by Abernathy-Daley covering nearly 58,000 corporate 401(k) plans delivered a simple—but startling—message: virtually every plan suffers from overpriced, underperforming funds. In fact, 99% of plans have at least one fund with a cheaper, better-performing alternative over three, five, and ten-year spans, and 85% of plans have at least five such alternatives. Put simply: plan sponsors and advisors are systematically letting participants pay too much for too little.

Why Fiduciaries Are Facing Legal and Ethical Heat

This isn’t just bad investment advice—it’s a liability. Abernathy-Daley pulls no punches: the industry suffers from misaligned interests, inertia, and opaque revenue sharing that keeps inferior funds on shelves. These problems are well established—the freakshow litigations at Southwest Airlines and UnitedHealth earlier this year underscore the legal risk of inaction.

What Fiduciaries Should Do Right Now

1. Benchmark Your Plan Annually

If you’re not comparing your lineup against peer medians every year—including returns and fees—you’re asleep at the wheel. Plans with persistent underperformers need to be pruned, fast.

2. Fix the Lineup

Plan advisors must be held accountable. If there are cheaper alternatives in the same fund category performing better, swap them out. Don’t let conflicts of interest justify inertia.

3. Boost Participant Education

The Bottom Line

Relying on participants to audit their own plan is fantasy. Instead, sponsor-led education must include easily digestible summaries of fee impact and fund replacement rationale.

This isn’t theoretical. It’s empirical: you’re almost guaranteed to find overpriced, lagging funds if you audit your 401(k) lineup. That’s a fiduciary failure—not an investment oversight.

If you’re serious about your duty as a fiduciary—if you’re serious about participants’ retirement outcomes—you’ve got to stop treating fund selection as a “set-it-and-forget-it” routine. Benchmarks, accountability, and education are not optional. They’re the difference between good faith compliance and systemic breach.

Look, I love a good soap opera. I grew up on Dallas, and I still sneak in The Bold and the Beautiful when I can. There’s something about the betrayal, the big reveals, and the constant twists that makes it compelling. But you know where I hate a good soap opera? In 401(k) plan beneficiary designations.

On May 1, 2025, the Fifth Circuit handed down a decision in LeBoeuf v. Entergy Corp. that reminds us—yet again—why 401(k) plan sponsors, participants, and yes, even plan committees, need to treat beneficiary designations like legal documents, not romantic subplots.

Let’s run through the plot.

Meet the Cast

Alvin Martinez worked for Entergy Corporation for over 35 years. He had a 401(k) plan account, worth about $3 million at the time of his death. In 2002, his wife passed away. In 2010, Alvin submitted a beneficiary form listing his four adult children as his beneficiaries. That form came with a warning: if he got remarried after submitting the form, his designation would be revoked unless he updated the form after the new marriage and got a notarized spousal waiver.

That warning wasn’t buried in the fine print—it was spelled out in black and white.

Fast-forward to 2014: Alvin gets remarried. No update to the form. No spousal waiver. Just quarterly statements from the plan that continued to list his kids as the beneficiaries—statements that apparently didn’t mention the plan rule that a new marriage nullifies a prior designation.

In 2021, Alvin passes away. The Committee paid the money, $3 million, to the second wife, not the adult children. The kids sued. The court said: case closed.

Don’t Blame the Committee

The adult children argued that the Committee misrepresented the plan by not correcting the quarterly statements. The court didn’t buy it. Why? Because Alvin got the plan document, the beneficiary form, and at least nine summary plan descriptions (SPDs) explaining the marriage provision.

He had the information. He just didn’t act on it.

The court also emphasized that participants have a duty to inform themselves about the plan. That’s a crucial takeaway. We live in a world where everyone expects the plan sponsor or recordkeeper to hold their hand through every life event. But here’s the truth: retirement plans aren’t babysitters. If you remarry, it’s on you to update your beneficiary form. If you divorce, same thing. If your beneficiary dies, again—your responsibility.

This Soap Opera Happens Too Often

I’ve seen this exact scenario more times than I care to count. It’s not just big companies like Entergy, this happens with small businesses too. A participant dies, and then the phone calls start. “But he told me I was the beneficiary.” “The quarterly statement says my name!” “He wouldn’t have wanted it this way.”

Maybe all true. But courts don’t care what he would have wanted. They care what he did. And if he didn’t update the form or get the spousal waiver, it doesn’t matter what’s on the statement.

The Fix: Annual Beneficiary Reviews

If you’re a plan sponsor reading this, here’s your action item: require your participants to review their beneficiary designations every single year. Make it part of your annual open enrollment or 401(k) check-in. Better yet, anytime a participant notifies HR of a life event, marriage, divorce, birth, death, make beneficiary review mandatory. It’s a small ask that avoids million-dollar mistakes.

Also, let’s get real: plan recordkeepers need to put disclaimers on those quarterly statements that remind participants the listed beneficiaries may be voided by life events. It’s not foolproof, but it’s better than radio silence.

Final Thought

Beneficiary designations aren’t dramatic until they are. Then suddenly, your 401(k) plan becomes an episode of Days of Our Lives, with grieving children and confused spouses fighting over a retirement account.

Don’t let that happen. Don’t let your plan be the one that ends up in federal court over a misunderstood form.

Because in the 401(k) world, the drama should be about investments, not inheritance battles.

And if you’ve got questions about cleaning up your beneficiary process or educating your participants, give me a call. I’d rather help you write a happy ending now than untangle the soap opera later.

Vestwell made headlines today by announcing a new partnership with Amazon’s Delivery Service Partner (DSP) program to offer Pooled Employer Plans (PEPs) to delivery associates. Sounds impressive, right? Let’s slow down. I’ve been in this business long enough to know when something has more press release sizzle than retirement plan steak.

At first glance, this is a feel-good story about democratizing retirement savings. Amazon has 400,000 drivers in its DSP network, and these small businesses have historically struggled to offer 401(k) plans. PEPs are supposed to simplify and reduce costs, and Vestwell wants to step in as the pooled plan provider. They’ll handle fiduciary duties, onboarding, and admin—essentially a turnkey retirement plan for folks who spend more time behind the wheel than behind a desk.

But here’s my skepticism: don’t assume this will result in a mountain of new 401(k) assets. In fact, this might just be a giant exercise in collecting dimes.

PEPs for the Little Guys: Nice in Theory, Tough in Practice

I’ve seen how these small employer PEPs and solo 401(k) PEPs play out. They sound revolutionary, “One plan to unite them all!,” but when the rubber meets the road, they rarely bring in large sums. Why? Because the average participating employer is tiny. You’re talking about owner-operators or companies with 5–10 employees, tops. Even if the plan sees decent participation, the average account balance is going to be modest. Very modest.

Remember, just because a PEP has access to 400,000 workers doesn’t mean anywhere near that number will enroll, or contribute meaningfully. You think every DSP is clamoring to start a retirement plan and make matching contributions? Many are barely keeping up with labor costs, insurance, and fuel prices.

This business is hard enough without fantasy projections about how many Amazon drivers are suddenly going to become long-term retirement savers. Yes, it’s a noble goal, but nobility doesn’t equal profitability.

Fiduciary Work for a Few Bucks a Month?

As a pooled plan provider, Vestwell is taking on a significant fiduciary and administrative load. When you’re dealing with hundreds or thousands of small employers, each with unique payroll quirks, language needs, and inconsistent staffing, the operational complexity balloons. And for what? A few bucks per participant per month?

It’s the same reason I warn advisors against going all-in on solo 401(k)s. You can fill your calendar helping sole proprietors and gig workers, but it’s a volume business with razor-thin margins. There’s a reason most national recordkeepers don’t chase this market: the juice isn’t worth the squeeze.

A Big Win for PR, Not Necessarily for Plan Providers

Don’t get me wrong—Vestwell deserves credit for taking on a tough, underserved market. But let’s not pretend this is going to rival a Fortune 500 company dropping a $100 million 401(k) plan on your platform. This is about incremental impact. Lots of little balances. Lots of work.

What’s the ROI here? It depends. If you believe PEPs will fundamentally reshape the small business retirement landscape, maybe this is your Woodstock. But from where I sit, this is more like a Costco run: you’re getting volume, not margin.

The Bottom Line

I’ve always said that success in this business comes from focus, not fantasy. PEPs are a good tool, but they’re not magic. Don’t expect a retirement gold rush just because Amazon’s logo is on the press release. It’s still a game of dimes, useful, important dimes, but dimes all the same.

And as always, don’t get caught up in the hype. Especially when the plan design is still in motion, the employers haven’t signed on, and the actual participation rate is anyone’s guess.

Because at the end of the day, I’m not interested in delivering packages, I’m interested in delivering results.

Without fail, every single day—like clockwork—I get a handful of emails trying to pry their way into my digital life. Sometimes it’s an alleged Amazon receipt I never made, sometimes a fake Dropbox notice, and sometimes it’s a desperate attempt to convince me I’ve inherited a fortune from an uncle I never knew existed. Spoiler: I haven’t. But behind these phishing attempts is a more serious truth—someone, somewhere is working full-time to breach your security. And in our industry, that’s not just annoying—it’s dangerous.

As a retirement plan provider, you’re not just protecting your own business; you’re holding the keys to someone else’s future. Their savings, their financial security, their dignity in old age—it all lives behind the digital gates we’ve built. And if those gates fall, don’t think for a second you won’t be held accountable. ERISA doesn’t shrug its shoulders when a cyber thief makes off with participant data or, worse, actual plan assets.

It’s not enough to rely on two-factor authentication and hope for the best. Hope is not a cybersecurity strategy. What you need is a real process—a living, breathing, regularly updated system that anticipates attacks, not just reacts to them. That means working with cybersecurity professionals who understand the unique regulatory environment of retirement plans. These aren’t just IT people who reset your password when you lock yourself out of Outlook. These are specialists who know how to defend access points, monitor behavior anomalies, and close off vulnerabilities before they become disasters.

Your clients won’t care that it was a Russian bot or a kid in a basement. If their accounts get drained, you’ll be the one answering for it. And frankly, you should be. As a fiduciary—or even just a service provider—you have a duty to prevent that kind of failure. And if you’re not taking that duty seriously, you shouldn’t be in this business.

Cybersecurity isn’t a compliance box you check off once a year. It’s an ongoing investment in your reputation, your relationships, and your responsibility to the people who trust you with their livelihoods. The risks are real, and the stakes are too high to wing it.

Take the threat seriously, build a defense, and remember: in the retirement plan world, silence from a hacker doesn’t mean safety—it usually just means they haven’t gotten in yet.