The Rosenbaum Law Firm P.C. Blog

AI can feel like magic—predicting outcomes, personalizing communications, streamlining decisions. But in the fiduciary world, magic without guardrails is a ticking lawsuit. Here’s what every sponsor should do before turning on the “AI switch”:

1. Start with your risk appetite, not the vendor’s pitch.

AI’s predictive analytics and digital twins are tempting. But before you deploy, calibrate how much error or bias you accept. Don’t let vendor demos drive the strategy—your fiduciary obligations must.

2. Document your governance at every layer.

Every AI model, training dataset, output, override decision—capture the thinking. When plaintiffs probe, “Why did you trust that algorithm?” your minutes and memos must not go blank.

3. Test for bias, fairness, and “hallucinations.”

Algorithms can replicate systemic bias or “invent” guidance (“hallucinate”) in surprising ways. Have independent audits. Validate recommendations manually in pilot runs before full deployment.

4. Keep humans in the loop.

Even the slickest model should defer to human judgment in edge cases. A chatbot nudging a participant toward a portfolio change? Let a fiduciary reviewer step in when thresholds are crossed.

5. Guard your data and privacy like it’s your last defense.

AI needs data—lots of it. But every data point is a vulnerability. Safeguard participant records, anonymize where possible, control access, and ensure your model can’t be reverse-engineered into private data.

6. Monitor outcomes continuously. Post-deployment, don’t set and forget. Watch for patterns of underperformance, discrimination, or abnormal behavior. If your outputs stray, pause, recalibrate, or shut down features.

7. Disclose transparently—and simply. Your participants don’t need an AI thesis, but they deserve clarity. Explain when AI is used, how, and what oversight exists. Don’t hide “automated advice” behind vague terms.

8. Start small—fewer assets, narrower scope.

Don’t let AI roll out across your entire plan at once. Use it first in lower-risk areas (communications, education, diagnostics). Gain operational trust before letting it touch portfolio or default mechanisms.

AI in retirement plans is not a gimmick, it’s a superpower, if constrained. But superpowers demand discipline, not recklessness. Do the homework now, build defensibility, and treat every AI decision as though it might end up in a complaint. Because in our field, the difference between innovation and exposure is always process.

When Pew reports that U.S. retirement assets crossed nearly $46 trillion in Q2 2025, it’s easy to be awed by scale. But what really caught my eye was their spotlight on the Saver’s Match, set to launch in 2027, and how it might supercharge automated savings programs like state auto-IRAs.

Here’s why I take this as both opportunity and warning:

· Incentives change behavior. The Saver’s Match promises a 50% federal match (up to $1,000 single / $2,000 married) deposited directly into eligible retirement accounts. That kind of incentive could turn passive savers into active savers. Operational complexity will be your fiercest adversary. The match can only go into traditional IRAs (not Roth), and many eligible contributors don’t even file federal returns. If the claiming process is clunky, much of the upside evaporates.

· Governance & process matter more than ever. With new dollars on the line and more participants entering via auto-IRA programs, the fiduciary exposure multiplies. Every allocation, every match, every error will be under the microscope.

· Disparities at stake. The match is targeted to low- and moderate-income workers—those groups historically underrepresented in plan ownership. So the upside is strong. But failure to deliver could worsen distrust.

So here’s what every plan sponsor, provider, and fiduciary should do now:

1. Model the match impact. Simulate how many new accounts, how much additional assets, and what processing burden the match could generate.

2. Design claiming systems defensibly. Make the match automatic where possible; minimize steps. If the software, payroll systems, or tax forms are awkward, you’ll get caught on the backend.

3. Layer in governance. This isn’t just about new dollars—it’s about managing massive growth while keeping fees, conflicts, and errors in check.

4. Communicate clearly. For people who’ve never been in a retirement plan, the match and how to access it must be simple, transparent, and low friction.

If the Saver’s Match works as intended, it could reshape the retirement savings landscape in America. But with great policy comes great responsibility. In a world of $46 trillion, the biggest differentiator will be who builds systems built for scrutiny—not just scale.

When total U.S. retirement assets hit a record $45.8 trillion in Q2 2025, it was headline news—and for good reason. not just a number; it’s a massive concentration of faith, expectations, and fiduciary risk. As one of the largest pools of private capital in our economy, these assets demand more than passive oversight—they demand vigilance.

But here’s the rub: growth begets scrutiny. As assets swell across IRAs, 401(k) plans, defined benefit plans, and annuity reserves, so too does the pressure on those entrusted to manage them. Are fees justified? Are conflicts disclosed and controlled? Are processes defensible? Every basis point and every decision now carries outsized exposure.

Plan fiduciaries must treat every allocation, every document, and every conversation as though it might land in a complaint. In a $45.8T world, there are no small cases—only small defensibility. The capital may be growing. But so is the need for ironclad governance, razor-sharp documentation, independent review, and transparency from top to bottom.

Because when you’re responsible for tens of trillions, there’s no margin for error.

It’s one thing for a corporate giant to be hit with fiduciary litigation—but quite another when the defendant is a law firm built on legal discipline. The recent lawsuit against Husch Blackwell, filed by a former partner, alleges the firm withheld employee 401(k) contributions, failed to timely forward them, and used them to cover its own operating expenses. \

What jumps out to me is how this case exemplifies the “small & grab” risk—where an internal actor becomes plaintiff, and a single misstep can become a full-blown ERISA action. If part of your firm’s compensation structure or benefits plan involves withholding or directing funds, you better have your fiduciary house in order: clean trails, strict oversight, independent review, and no ambiguity about every penny’s direction.

Because in the retirement plan world, the people doing the suing sometimes know the law better than you do—and they’ll drag you through all your own documents.

If you thought catch-up contributions were settled territory, think again. The IRS has now issued final regulations under SECURE 2.0 that require, as of January 1, 2026, that catch-up contributions for certain higher-earning participants must be made on a Roth (after-tax) basis.

Here’s the bottom line: if a participant aged 50+ had FICA wages above $145,000 in the previous year (subject to indexing), any catch-up contributions they make must be designated Roth contributions. That changes the tax dynamics, the recordkeeping, and the communication burden for sponsors.

Key Implications for Plan Sponsors

1. System & Vendor Readiness

Your payroll, recordkeeping, and elections systems must be able to distinguish between catch-up contributions that must go Roth versus those that can remain pre-tax. That’s a nontrivial update.

2. Document & Plan Design Review

If your plan doesn’t currently allow Roth contributions, catch-up participants subject to the rule will be unable to make catch-up contributions. The regulations provide nondiscrimination relief in such cases — but you need to understand how it works and consider whether to amend your plan.

3. Communication Is Critical

Many participants will never have made Roth contributions in a retirement plan before. You must educate them about the tax tradeoffs — paying taxes now vs. potential tax-free distributions later — and help them recalibrate their deferral strategies.

4. Good-Faith Compliance

Window Even though the statutory requirement begins in 2026, the final regulations give sponsors leeway to rely on a “reasonable, good-faith interpretation” through the end of 2026. But that’s a bridge — not a long-term excuse.

The Rosenbaum Take

This is a move with real teeth. It forces a shift in how retirement saving is taxed for higher earners in their catch-up years. If you’re a plan sponsor who delays preparation, you risk scrambling — or worse, failing compliance.

Start working now with your legal, recordkeeper, and payroll teams. Update your plan documents, run mock elections, and communicate proactively. Because once 2026 hits, the era of pre-tax catch-up for high earners ends — whether your systems are ready or not.

If you thought catch-up contributions were settled territory, think again. The IRS has now issued final regulations under SECURE 2.0 that require, as of January 1, 2026, that catch-up contributions for certain higher-earning participants must be made on a Roth (after-tax) basis.

Here’s the bottom line: if a participant aged 50+ had FICA wages above $145,000 in the previous year (subject to indexing), any catch-up contributions they make must be designated Roth contributions. That changes the tax dynamics, the recordkeeping, and the communication burden for sponsors.

Key Implications for Plan Sponsors

1. System & Vendor Readiness

Your payroll, recordkeeping, and elections systems must be able to distinguish between catch-up contributions that must go Roth versus those that can remain pre-tax. That’s a nontrivial update.

2. Document & Plan Design Review

If your plan doesn’t currently allow Roth contributions, catch-up participants subject to the rule will be unable to make catch-up contributions. The regulations provide nondiscrimination relief in such cases — but you need to understand how it works and consider whether to amend your plan.

3. Communication Is Critical

Many participants will never have made Roth contributions in a retirement plan before. You must educate them about the tax tradeoffs — paying taxes now vs. potential tax-free distributions later — and help them recalibrate their deferral strategies.

4. Good-Faith Compliance

Window Even though the statutory requirement begins in 2026, the final regulations give sponsors leeway to rely on a “reasonable, good-faith interpretation” through the end of 2026. But that’s a bridge — not a long-term excuse.

The Rosenbaum Take

This is a move with real teeth. It forces a shift in how retirement saving is taxed for higher earners in their catch-up years. If you’re a plan sponsor who delays preparation, you risk scrambling — or worse, failing compliance.

Start working now with your legal, recordkeeper, and payroll teams. Update your plan documents, run mock elections, and communicate proactively. Because once 2026 hits, the era of pre-tax catch-up for high earners ends — whether your systems are ready or not.

Whenever I sit with a retirement plan committee, I can’t help but be reminded of my experiences with nonprofit boards — both as a member and as legal counsel. The dynamics are eerily similar. On paper, everyone is there for the same noble reason: to serve the greater good. In reality, people bring their own baggage to the table.

Most committee members genuinely want to do right by the participants. They volunteer their time, they review reports, they ask questions, and they take the fiduciary role seriously. These are the people you want in the room — the ones who understand that overseeing a retirement plan isn’t glamorous, but it’s critically important to the lives of employees who are counting on those benefits when they retire.

But then, there are the others. You know them. They join the committee because they like the sound of a title, or because they see it as a platform for power inside the organization. Sometimes they use meetings to grandstand, or to score points with leadership. The problem is, fiduciary duty is not about ego. It’s about loyalty, prudence, and putting participant interests ahead of your own. When personal agendas creep into the room, the committee loses focus — and participants can pay the price.

As an ERISA attorney, I’ve seen how messy things get when committees don’t function properly. Distractions multiply, critical questions don’t get asked, and decisions are made for the wrong reasons. That’s when plan sponsors end up in lawsuits, or on the wrong side of a DOL investigation.

The lesson? Make sure your retirement plan committee is populated with people who understand the responsibility and want to be there for the right reasons. Give them training. Keep minutes. Have clear policies. And don’t be afraid to rotate out members who treat it like a vanity project.

Serving on a retirement plan committee isn’t about prestige. It’s about stewardship. At the end of the day, it’s not your ego that’s at stake — it’s the financial future of every employee who relies on the plan.

Good news — the Senate has confirmed Daniel Aronowitz as Assistant Secretary of Labor, giving him the reins at the Employee Benefits Security Administration (EBSA). After a protracted seven-month wait, the confirmation vote (51–47) places the fiduciary world squarely in a moment of potential reset.

What He Pledged — And What to Watch

Aronowitz’s agenda, as he laid it out during the confirmation hearings and in public statements, suggests an aggressive pivot in EBSA’s posture. Some of his key objectives:

· Enforcement reform. He has vowed to end open-ended investigations and streamline fiduciary enforcement, making it more predictable and less litigation-driven.

· Regulatory clarity. He wants clearer rules so plan sponsors can act with confidence — minimizing regulatory ambiguity and chilling effects.

· Pro-ESOP tilt. Aronowitz has openly criticized what he sees as DOL’s anti-ESOP bias. He pledged to “end the war on ESOPs” and resist overzealous attacks on valuation professionals.

· Restoring fiduciary discretion. He frames one core principle as shifting decisions back to fiduciaries (not bureaucrats or plaintiffs’ lawyers), consistent with his view of how ERISA was intended

Why This Matters for You (As an Advisor, Sponsor, or Fiduciary)

· The regulatory environment is about to shift. Compliance strategies based on the “status quo” may be obsolete — sooner than later.

· Cases long stuck in limbo under aggressive enforcement periods may see fresh life, or new scrutiny under different priorities.

· Those managing ESOPs, or dealing with fiduciary liability and valuation risk, should especially keep their eyes on proposed DOL rulemaking.

· Documentation, process, and defensibility will remain vital — even more so when the ground rules may be redrawn.

This confirmation isn’t just a personnel change. It signals the possibility of a new guard at EBSA — one with a distinctly different philosophy than what we’ve seen in recent years. How much of this vision becomes reality depends on statute, courts, and the political environment. But for now, we have a new leader with ambitious goals. Stay tuned — things may move quickly.

The clock is ticking. Starting January 1, 2026, the world of catch-up contributions changes in a big way. Thanks to SECURE 2.0 and the IRS’s final regulations, higher-earning participants who want to make catch-up contributions will only be able to do so on a Roth (after-tax) basis.

For plan providers — whether you’re a TPA, advisor, payroll vendor, or recordkeeper — this isn’t just another technical tweak. It’s a sweeping operational shift. Let’s break it down.

What’s Changing

Beginning in 2026, if a participant earned more than $145,000 in FICA wages from the plan sponsor in the prior year (indexed for inflation), any catch-up contributions they make must be Roth. No more pre-tax catch-up for that group.

Participants under the threshold can still choose pre-tax or Roth for catch-up. But the burden on providers is identifying which employees are in which bucket — and making sure systems handle the difference without error.

The Operational Pressure Points

1. Identifying Who’s Impacted

Payroll systems must flag which participants cross the $145,000 wage threshold each year and communicate that to recordkeepers. That determination has to be timely and accurate.

2. Handling Elections

Many plans use a “spillover” method: once a participant hits the elective deferral limit, additional amounts automatically go into catch-up. Under the new rule, those spillovers must switch to Roth if the participant is over the wage threshold. That requires systems to flip designations automatically.

3. Tracking Contributions Separately

Providers need clean separation between pre-tax and Roth contributions. Mixing them and trying to fix it later won’t cut it. Precision on the front end prevents compliance messes on the back end.

4. Correcting Errors

Mistakes will happen. If a high earner’s catch-up goes in as pre-tax, there are only two ways out: either reclassify through payroll before year-end, or process as an in-plan Roth conversion with appropriate reporting. Both methods are operational headaches. Providers should plan now for which correction path they’ll use.

5. Communication & Education

Many participants in this category have never contributed to Roth in a plan before. They need to understand the tax implications: pay taxes now, enjoy tax-free qualified withdrawals later. Providers have to arm sponsors with clear, simple education materials to get ahead of confusion.

The Rosenbaum Take

This is a regulation with real bite. For plan providers, it’s not enough to just “wait and see.” You’ll need to work closely with payroll, recordkeeping, and plan sponsors to ensure processes are aligned before 2026.

The risk isn’t just compliance failure. It’s the chaos that comes when participants get the wrong tax treatment, or when contributions have to be clawed back and reclassified after year-end. That’s when angry calls come in — and that’s when sponsors start looking for new providers.

My advice is simple: don’t wait. Test your systems now. Run mock scenarios. Draft your communication templates. Help your clients amend plan documents if Roth isn’t currently an option. The providers who are proactive will win trust. Those who lag will lose credibility.

The era of Roth-only catch-up for high earners is almost here. Providers who prepare early won’t just survive it — they’ll turn it into an opportunity to prove their value.

The latest chapter in the wave of forfeiture reallocation lawsuits comes from Armenta v. WillScot / Mobile Mini. The good news: most of the claims were dismissed. The caution: one prudence claim survived, and the court gave the plaintiff a chance to amend.

What Happened

The lawsuit challenged how plan forfeitures were used, arguing they should have been applied first to pay administrative expenses instead of reducing employer contributions. The court dismissed most counts, noting the plan document gave discretion by saying forfeitures “may” be used for admin costs — not “must.” Claims of disloyalty and prohibited transactions didn’t stick.

But one claim remains: whether fiduciaries acted prudently in their process. The court is allowing the plaintiff to try again, focusing on how decisions were made rather than what outcome occurred.

Why It Matters

This case reflects a broader pattern. Many forfeiture suits are getting tossed, but courts are open to claims that target the decision-making process. Judges aren’t as interested in second-guessing outcomes as they are in whether fiduciaries engaged in a thoughtful, documented process.

Lessons for Fiduciaries and Plan Sponsors

· Plan language matters. Words like “may” versus “must” can be the difference between discretion and liability. Review your documents and know what flexibility you have.

· Process is everything. Keep records of how decisions are made around forfeitures. Meeting minutes, comparisons, and documented alternatives can make or break a case.

· Dismissal isn’t final. Plaintiffs often get another chance, as here. Even when claims are weak, expect persistence.

· Be proactive. Don’t wait for a lawsuit to review your forfeiture provisions and fiduciary practices. A little preparation now is cheaper than defense later.

Bottom Line

The court’s ruling is encouraging for fiduciaries — most of the claims didn’t stick. But the fact that a prudence claim survived is a reminder: outcomes matter less than process. If you’re making discretionary decisions about forfeitures, make sure the “paper trail” shows a prudent, deliberate process.