The Rosenbaum Law Firm P.C. Blog

Schlichter Bogard, LLC represents participants of the $7 billion Charter Communications, Inc. 401(k) Savings Plan in a class action against Charter Communications, Inc.

The suit claims that rather than using the Plan’s forfeiture assets to pay all Plan administrative expenses, as required by the terms of the Plan, Charter used forfeitures to reduce the employer matching contributions.

The lawsuit claims that Section 6.9 of the Plan required, how Plan forfeiture assets would be used by Charter. Plan forfeiture assets were first required to be used to ‘pay Plan administrative expenses.

Charter reported in its 2019 Form 5500 that it used $16.3 million in Plan forfeiture assets to reduce its employer matching contributions, but in that same Form 5500 Charter reported that Plan participants were charged an allocation of administrative expenses paid by the Plan for $7.3 million. The suit says that Charter can only use forfeitures to reduce contributions after expenses have been paid.

As a 401(k) plan sponsor, you need to operate according to its terms. The concept is silly, but the fact is that most plan sponsors never read the plan document. You might think you’re excluding or including union employees, and it might turn out wrong.

A plan document excluding employees you included is one problem, but including employees in the plan document and you excluded in administration, is a costlier headache in potential corrective employer contributions.

I’ve seen too many of these plan document issues of late, so make sure the plan document is consistent in your administration of which employees you cover, and who you exclude.

Vanguard announced expense ratio reductions to 168 mutual fund and exchange-traded share classes across 87 funds. The reductions will save investors more than $350 million in 2025 alone, the largest annual expense ratio reduction in Vanguard’s nearly 50-year history.

In addition to Vanguard’s lineup of bond mutual funds and ETFs, these expense ratio reductions will lower costs across Vanguard’s U.S. equity, international equity, and money market funds.

The Department of Labor (DOL) has released Field Assistance Bulletin 2025-01 (the Bulletin), allowing ERISA fiduciaries to transfer retirement balances of under $1,000 to a state unclaimed property fund.

The Bulletin describes a DOL nonenforcement policy for fiduciaries that decide to transfer the account balances of missing participants (including uncashed checks) to a state’s unclaimed property fund, as long as the amount of the benefit is $1,000 or less. In addition, the plan’s fiduciaries must ensure that the state’s unclaimed property fund is a prudent destination for the participant’s balance.

The fiduciary also must have a prudent program in place to attempt to locate the missing participant, and the state selected for the transfer of the unclaimed property must be the state of the participant’s last known address. Finally, the state unclaimed property fund must meet other DOL requirements, including updating the plan’s summary plan description to include the possibility of transfer of benefits to an unclaimed property fund.

Imagine if Mark Zuckerberg hatched the idea for Facebook, yet all he did was talk about the site instead of developing it. Imagine if Jeff Bezos talked for a year or two about selling books on the Internet instead of going through developing the actual Amazon website.

It’s not enough to have a great idea in the retirement plan space, you need to develop a plan to carry it through to the marketplace. I will have to say that one of the most annoying parts of this business is hearing plan providers with terrific ideas, yet failing to come to the market with them. I once had a third-party administrator client who promised he’d make us all rich in the open multiple-employer space, instead, he dawdled long enough for the Department of Labor to put the kibosh on them in that TAG advisory opinion.

Great ideas aren’t enough, a plan to take those ideas to the marketplace is needed.

With the change of Presidential administrations, there was certainly a discussion on what the Department of Labor (DOL) may do under President Trump regarding 401(k) plans. As far as regulations, an Executive Order may halt any significant change.

Under a new Executive Order signed by President Donald, which is supposed to “unleash prosperity through deregulation,” whenever a federal agency promulgates a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed.

The executive order requires that the total incremental cost of all new regulations, including repealed regulations, be significantly less than zero.

If the DOL wants to unveil a regulation on the fiduciary rule, they would have to identify 10 regulations or rules to repeal. So don’t expect a lot of DOL regulaations this year.

George Carlin had a joke that to get off a jury, you should just tell the Judge that you can determine a person is guilty by just looking at them.

Abernathy Daley 401(k) Consultants claim that 84 percent of U.S.-based retirement plans have at least one likely ERISA red flag from a regulatory and/or fiduciary violation by looking at their Form 5500.

Honestly, it’s much ado about nothing. They cite as a reg flag for plans that don’t cite they are participant-directed for investment, but there’s no legal requirement that a plan be 404(c) compliant nor that they offer a QDIA. There are glaring errors that can be found on Form 5500, but these aren’t them.

I always say that every 401(k) plan has an issue that you can find if you want to, but it’s not usually gleaned from a Form 5500, because those are glaring errors such as late deferral deposits or not having the right bond amount.

You can be like Dean Wormer and place 84% of plans on double secret probation, but a Form 5500 isn’t such a smoking gun.

Equitable has introduced Equitable Retirement Access, the company’s 401(k) Pooled Employer Plan (PEP).

The Equitable Retirement Access plan will include the following providers:

• PlanConnect LLC, an affiliate of Equitable, serves as the recordkeeper

• Pension Plan Specialists will act as the Pooled Plan Provider, third-party administrator, and 3(16) administrative fiduciary

• SWBC Retirement Plan Services will function as the 3(38) investment fiduciary

• Plan Notice LLC will handle notice delivery services.

The PEP is available through the Equitable Retirement Vision platform, an existing retirement plan platform with a group fixed annuity contract issued by Equitable Financial Life Insurance Company.

According to new research published by the Investment Company Institute (ICI), Americans like their retirement plans. ICI’s research report “American Views on Defined Contribution Plan Saving, 2024” finds that almost 75% of Americans had favorable impressions of 401(k) and similar defined contribution (DC) plan accounts.

That’s important as Congress needs to pass tax legislation, and someone there will float the idea of eliminating the tax deferral aspect of their 401(k) plans, which most taxpayers would oppose.

I was a first-year law student participating in moot court, just because all second-year students participated even when I knew I had zero interest in ever being a litigator. In those days, my mother would buy me these cheap character ties at Marshall’s, as well as these really nice Nicole Miller ties (it was the 1990s).

The second-year students were in charge of the moot court and one of the judges in my case was a highly opinionated student government official. After I presented, he criticized my Flintstones tie as being inappropriate. I don’t judge people by the look of their tie, but a lot of people do. While I like to wear Mitchell and Ness jerseys and Vineyard Vines shirts, I don’t wear them to important meetings with potential clients and if I do dress that way with other providers, I warn them ahead of time that I’m doing it. The point is that while you should never judge a book by its cover, people still do and you shouldn’t lose a potential opportunity just because of the way you dress.

As a side note, this criticizing judge was pompous and a know-it-all all. His law license was later suspended for lying to the FBI.