The Rosenbaum Law Firm P.C. Blog

The Investment Company Institute (ICI) just confirmed what many of us have seen on the ground: 401(k) mutual fund fees keep dropping, and that’s great news for plan participants.

According to ICI’s 2024 report, average equity mutual fund expense ratios in 401(k) plans have fallen 66% since 2000—from 0.76% to just 0.26%. Bond and hybrid fund fees dropped, too. Even target-date mutual fund fees fell 57% over the last 16 years, now averaging 0.29%.

What’s driving this? A few things:

· Fierce competition among fund providers;

· Plan sponsors who know what they’re doing and opt for low-cost share classes;

· Economies of scale;

· And participants who are (finally) paying attention to fees.

Bottom line: The 401(k) market works when it’s built right. Lower costs mean more savings stay in participants’ pockets, and this trend shows no sign of stopping.

The IRS just dropped Revenue Ruling 2025-15, and while it’s not revolutionary, it’s a reminder that when it comes to uncashed distribution checks, constructive receipt still rules the day.

Here’s the deal: If a participant or beneficiary doesn’t cash their distribution check, it doesn’t matter—the plan still has to withhold taxes and issue a Form 1099-R. No refund, no do-over, unless there was an actual calculation error. The check was issued, they could have cashed it, and that’s what counts.

If the plan sends a replacement check, you don’t withhold again—unless the second check is for more (say you added interest). Then you withhold on the difference and report that extra piece separately.

Bottom line? Participants can’t dodge taxes by ignoring their money, and plan sponsors need to report distributions based on the facts at the time of payment, not whether the check gets cashed.

No surprises here, just classic IRS: If you make a payment, you report it. The end.

News that Principal has transitioned administration of its largest pooled employer plan (PEP), Principal EASE, to FuturePlan by Ascensus isn’t just a reshuffling of duties — it’s a smart move in a maturing market.

Principal EASE serves a large base of small- and mid-sized businesses, many of which are new to offering a retirement plan. That means getting administration right isn’t optional — it’s mission-critical. By bringing in FuturePlan as the 3(16) fiduciary and TPA, Principal is doubling down on what it does best: investments, recordkeeping, and distribution. And it’s outsourcing the complex and time-consuming tasks to a TPA that already supports over 37,000 plans.

It’s a sign of the times. PEPs aren’t a novelty anymore. They require real infrastructure, clear roles, and expert compliance. With the number of 401(k) plans expected to pass one million by 2030, providers who know when to delegate—and who to delegate to—will lead the pack.

This isn’t a step back for Principal. It’s a step forward for everyone in the PEP ecosystem: providers, advisers, employers, and ultimately, participants.

When I look back at my time as an employee, before I ran my own practice, before I was speaking in stadiums and calling the shots, I remember two kinds of people: the good ones and the bad ones. And truthfully, most fell in that first category. I always tried to be the good fellow employee. I treated people with respect, did my work, and showed up. I wasn’t perfect, but I never tried to hurt anyone. I wasn’t there to step on necks or play office politics, I just wanted to do the work, do it well, and maybe, at the end of the day, earn the respect that comes from that.

But some people? They had a different playbook.

I can’t get one moment out of my head, even all these years later. I was a law clerk at Bernkopf Goodman. I wasn’t even in the deep end yet—still learning, still finding my footing. And there were these two partners talking. From where I was sitting, I was convinced they were goofing on me. Whispering, chuckling, glancing in my direction. Maybe it was paranoia. Maybe it wasn’t. But when you’re the young guy in a rigid pecking order, it’s hard not to feel like you’re the punchline.

And here’s the twist: those partners? They didn’t last. The firm no longer needed their services at a certain point. Why? Because they weren’t bringing it in, as they say. They weren’t producing. You can coast on bravado for only so long in this business before the numbers catch up with you. And when they did, the snickering stopped.

I never wish bad on people like that. Honestly, I don’t have the energy for grudges. But I’ve lived long enough to see how this all plays out. The bullies, the snarkers, the ladder-climbers who step on others to rise, they always get their comeuppance. Maybe not on your schedule, but it happens. Because in the long game, talent, integrity, and consistency always win out. The quiet people doing the work eventually pass the loud ones making the noise.

That’s one of the small comforts I take from those years. That and the knowledge that I didn’t have to burn anyone down to get ahead. I stood up for myself when I had to, and maybe that rubbed some the wrong way. But I’d rather be remembered for being decent than being a shark.

So, to those still grinding it out in the office trenches, keep your head up. Do the work. Treat people right. And when you feel like someone’s mocking you or trying to make you feel small, remember this: time has a funny way of revealing people’s true value.

It all works out in the end. It really does.

itcoin has blown past $120,000 and, predictably, the buzz is back. Advisors are getting questions. Participants are curious. And yes, some plan sponsors are starting to wonder if it’s time to add crypto to their 401(k) investment lineup.

Let me stop you right there: don’t do it.

The price tag may be seductive, but volatility doesn’t mix well with fiduciary responsibility. Bitcoin isn’t just volatile—it’s an unregulated, speculative asset class with massive price swings and zero fundamentals. Unlike traditional investments, it doesn’t produce income, it isn’t backed by hard assets, and it doesn’t follow the rules of rational markets. That’s not an opinion. That’s the nature of crypto.

As a plan sponsor, your job under ERISA isn’t to chase hype. It’s to act prudently and solely in the best interest of participants. Adding Bitcoin to your 401(k) plan may sound “innovative,” but the risk/reward profile is wildly inappropriate for retirement savings. One bad swing, one negative headline, and participants lose faith, not just in the investment, but in the entire plan.

Regulators aren’t exactly thrilled either. The DOL has already raised serious concerns about crypto in retirement plans. If you think offering Bitcoin gives you an edge, consider how you’ll explain it in a deposition when participants lose their shirt.

Let Bitcoin do what it does, but keep it out of your 401(k). Plan sponsors should focus on delivering long-term, risk-adjusted returns, not headlines.

Leave the crypto speculation to the sidelines. Your fiduciary duty demands better.

It’s not often you see the U.S. Department of Labor jumping into the legal ring to back plan sponsors, but when they do, you know something bigger is at stake than just one plan participant’s gripe. That’s exactly what happened in Hutchins v. HP, Inc., a case that has become a flashpoint over one of the oldest and most misunderstood practices in defined contribution plans: forfeitures.

Let’s get the basics out of the way. Forfeitures happen when an employee leaves a company before fully vesting in their employer contributions. Those unvested dollars go back into the plan and, here’s the important part, they can legally be used to either pay administrative expenses or offset future employer contributions. This isn’t a loophole or a gray area. It’s been standard procedure for decades, blessed by the Internal Revenue Code, Treasury regulations, and, yes, even the ERISA statutes themselves.

But apparently, that’s not enough for the plaintiffs’ bar.

Paul Hutchins, a participant in HP’s 401(k) plan, filed a lawsuit claiming that HP’s use of forfeited funds to offset its matching contributions somehow violated ERISA’s fiduciary duties. Never mind that this practice is disclosed in plan documents, permitted by law, and used across the industry. His theory? That these forfeited funds should have been used to pay administrative fees instead.

The district court in Northern California tossed the case. Rightfully so. But Hutchins appealed, and now the case sits in front of the Ninth Circuit, dragging along with it a parade of copycat class actions aimed at blowing up a half-century of settled law.

Enter the DOL.

In a rare show of unified defense, the Department of Labor, alongside ERIC and other trade groups—filed an amicus brief not just urging the Ninth Circuit to uphold the lower court’s ruling, but warning of the tidal wave of chaos that could follow if it doesn’t. And they didn’t mince words: “The Plaintiffs’ bar cannot get what it wants from Congress, and it cannot get what it wants from the executive agencies, so it has invited the judicial branch to rewrite a half century of settled law relating to forfeitures.”

That’s not legalese. That’s a shot across the bow, and one that had to be fired.

Because if Hutchins wins, every plan sponsor in America suddenly finds themselves on shaky ground. Legal costs skyrocket. Plan costs go up. Forfeiture strategies that were once routine become landmines. And who pays for all that? Participants. Not in theory. In practice. In real dollars that should have gone toward improving plans, reducing fees, or adding benefits.

This case isn’t about protecting participants. It’s about opening the litigation floodgates. It’s about trial lawyers trying to convert standard, lawful plan practices into new revenue streams under the guise of fiduciary breach.

And let’s not forget, these forfeiture practices are disclosed. They’re in the plan documents. They’re reviewed by recordkeepers and ERISA counsel. They’re audited annually. If that’s not enough to insulate plan sponsors from liability, then we’ve crossed into dangerous territory where any fiduciary decision can be second-guessed by hindsight and headline-chasing lawsuits.

The DOL gets this. That’s why they’re taking a firm stance: using forfeitures to offset employer contributions is not a breach of fiduciary duty, it’s a longstanding, permissible practice. And one that, when properly executed and documented, benefits the plan and its participants.

The final paragraph of the DOL’s brief says it best: “The Secretary has a substantial interest in fostering established standards of conduct for fiduciaries by clarifying the Secretary’s view that a fiduciary’s use of forfeited employer contributions in the manner alleged in this case, without more, would not violate ERISA.”

Translation? Let’s not turn every routine administrative decision into a litigation trigger. Let’s not scare plan sponsors out of offering robust retirement benefits. And let’s not let lawyers rewrite the rules just because they don’t like how Congress or the IRS did their job.

The Ninth Circuit has an opportunity here, not just to decide a case, but to restore some sanity to the retirement plan landscape. Here’s hoping they do the right thing. Because ERISA’s not perfect, but it doesn’t need a rewrite from a courtroom. It just needs to be followed as written.

For years, if you asked a 401(k) plan sponsor what their top concern was, you’d get a predictable answer: cost. Cutting expenses. Reducing fees. Pinching pennies. And it made sense. In a post-fee lawsuit world, with advisors and fiduciaries sweating bullets over every basis point, plan sponsors were laser-focused on keeping costs down.

But according to Escalent’s 2025 Retirement Planscape report, the times, they are a-changin’. Just 40% of plan sponsors now say that reducing plan costs is a priority, down from 50% last year. That’s not a gentle slope; that’s a pretty steep drop. And in its place? Cybersecurity and artificial intelligence.

We’ve entered the era where cost is no longer king. Fear is.

Let’s talk about fear first—cybersecurity. Seventy percent of all plan sponsors reported experiencing a 401(k)-related data breach in the last year. That’s not a rounding error. That’s an epidemic. And it’s not just the small guys fumbling with passwords taped to their monitors. Even 10% of large-mega plans (those managing $100 million or more) got hit. It’s not a matter of if your plan will get attacked, it’s when.

And the DOL knows it. Last September, they extended their cybersecurity guidance beyond retirement plans to include health and welfare plans too. In other words, they’re acknowledging that your participant data is as much a fiduciary liability as your investment menu. That’s a sea change. A plan sponsor that isn’t taking cybersecurity seriously today is tomorrow’s front-page fiduciary disaster.

Sonia Davis from Escalent hit the nail on the head: sponsors are trying to wrap their arms around this new landscape. They’re putting protocols in place, tightening up access controls, vetting their providers more carefully—and, let’s be honest, bracing for lawsuits if and when something goes wrong. Because in this world, a data breach isn’t just an IT issue—it’s a fiduciary time bomb.

But alongside the fear, there’s also a bit of optimism. That’s where AI comes in.

The same plan sponsors that are sweating bullets over data hacks are also starting to see AI as a solution, not just a risk. Sixty-six percent of sponsors managing $100 million or more believe AI can offer a better participant experience. We’re talking virtual assistants answering 401(k) questions, tailored simulations for retirement outcomes, and more personalized engagement.

That’s not fluff. That’s meaningful evolution. If we want participants to take their retirement savings seriously, we need to meet them where they are, with tools that don’t feel like they were built in 1998. AI can bring real-time support, customization, and education in ways that glossy enrollment booklets and quarterly statements never could.

But—and this is a big but—this only works if sponsors and providers deploy these tools intentionally. You can’t just slap a chatbot on your website and call it innovation. You need

AI that’s transparent, secure, and designed with participant outcomes in mind—not just provider marketing goals.

And here’s the kicker: plan sponsors aren’t just hoping for this evolution—they’re expecting their providers to lead it. The message from employers is clear: bring us smarter tools, better engagement, and stronger defenses. That’s the new value proposition. It’s not about who can shave 5 bps off the recordkeeping fee anymore, it’s about who can keep participant data safe while improving their retirement readiness with cutting-edge technology.

So, to my fellow plan providers: the winds have shifted. If you’re still selling solely on cost, you’re playing yesterday’s game. Sponsors want more. They need more. And if you can deliver AI-driven personalization while locking down cybersecurity, then you’re not just a provider, you’re a partner for the next generation of retirement plans.

And to plan sponsors: it’s OK to still care about costs. But don’t lose sight of the new battlefield. In a world of ransomware, phishing, and deepfakes, protecting participant data is fiduciary prudence. And embracing technology, carefully and strategically, is how you turn your plan from a checkbox into a real benefit.

Welcome to the new frontier. It’s not just about saving money, it’s about protecting it, growing it, and educating your participants every step of the way.

When Congress passes sweeping retirement legislation, the details often come later—and those details usually come in the form of regulatory spaghetti that plan sponsors and administrators are left to untangle. Case in point: the Roth mandate under Section 603 of SECURE 2.0. And now, the AICPA has weighed in, asking Treasury and the IRS to bring some order to the chaos.

Let’s rewind. Section 603 of SECURE 2.0 (part of the massive year-end legislation bonanza known as the Consolidated Appropriations Act of 2023) dropped a bomb on catch-up contributions for high earners. It mandates that catch-up contributions for certain participants be made on a Roth basis—meaning after-tax. The proposed regs (REG-101268-24) issued in January gave us a start, but as usual, they left more questions than answers.

That’s where the AICPA comes in. In a July 1 letter, the organization asked for additional guidance, and frankly, they’re not wrong to do so.

Here’s the crux of it: if you’re 50 or older and earn over a certain threshold (currently $145,000 in wages from the current employer), your catch-up contributions must be Roth. The problem is, employers and plan providers need to know exactly how to determine who’s subject to this rule and what counts as wages. And they need to know it before they’re penalized for getting it wrong.

Kristin Esposito, director of Tax Policy & Advocacy at the AICPA, said it well: “Post-SECURE 2.0, employers and plan administrators will need clear guidance to ensure compliance of the law regarding Roth-mandated catch-up contributions.” That’s not just an understatement—it’s a polite way of saying “this is a hot mess and you need to fix it.”

One of the main asks from the AICPA? A safe harbor that lets plan sponsors rely on W-2 wage information to determine who’s above the Roth threshold. That seems like a no-brainer. If we expect HR departments and payroll providers to cross-reference every dollar from predecessor employers or related entities, we’re setting people up for failure. Not to mention the audit headaches that will follow.

And speaking of related entities, the AICPA wants the IRS to clarify how disregarded entities are treated. For employment tax purposes, disregarded entities file with their own EINs and are treated like employers. But when it comes to determining who’s the “employer sponsoring the plan” under Prop. Regs. Secs. 1.414(v)-2(b)(3) and (4), the waters are murky at best. If you’re a plan sponsor operating across multiple business structures, this guidance could mean the difference between compliance and noncompliance.

Bottom line? The intent behind the Roth mandate may be noble—getting more tax revenue now, simplifying retirement income later—but implementation is another story. Without clarity, we’re going to see a lot of errors, a lot of compliance risk, and a lot of unhappy plan sponsors.

This isn’t about dodging the Roth rule. It’s about making it administrable. Plan administrators shouldn’t have to be forensic accountants to determine who qualifies for a catch-up contribution

and whether it needs to be Roth. And participants shouldn’t be surprised by a tax treatment they didn’t ask for and might not understand.

So hats off to the AICPA for stepping in with practical suggestions. If Treasury and the IRS are smart—and I hope they are, they’ll take this feedback seriously and issue guidance that makes implementation smoother, not harder.

Because the SECURE 2.0 Act was supposed to improve retirement security—not trap employers and participants in a bureaucratic maze of unintended consequences.

In a world where retirement plan innovation often comes with more flash than substance, it’s refreshing to see a strategic alliance that actually addresses a fundamental challenge in defined contribution plans: providing real lifetime income.

Transamerica just announced it’s teaming up with Nuveen and TIAA to roll out the Nuveen Lifecycle Income Index CIT Series (NLI), a target-date fund offering that includes a slice of guaranteed lifetime income through the TIAA Secure Income Account (SIA). If that sounds like a mouthful, don’t worry, it’s basically a target-date fund that comes with a pension-like feature built in. And for those of us who remember pensions fondly, or at least remember a time when people had pensions, that’s a big deal.

Let’s break this down: Transamerica will make the NLI CIT Series available on its recordkeeping platform as a default investment option. That alone is worth watching. Defaults are where the money goes, and if this becomes the QDIA of choice for plan sponsors, it could put lifetime income front and center for participants who might not otherwise seek it out.

The NLI structure aims to do a few things: maintain liquidity, keep costs in check, offer portability, and reduce volatility, all while embedding the opportunity for participants to convert part of their savings into a steady paycheck for life. The investment side is managed by Nuveen, which brings institutional heft, and the income guarantee comes from TIAA, a name that’s been around longer than most 401(k) plans.

There’s no obligation for participants to annuitize, which is smart, no one likes being locked into something unless there’s a real benefit. But for those who choose to do so, the TIAA Secure Income Account offers predictable lifetime income backed by some of the strongest insurance ratings in the business. Add in the TIAA Loyalty Bonus and potential for increasing payments in retirement (to help fight inflation), and it becomes even more compelling.

Colbert Narcisse at TIAA says this setup simplifies plan administration and delivers on what many workers actually want: security and predictability in retirement. Brendan McCarthy at Nuveen echoed the demand angle, pointing to their research showing that workers overwhelmingly want lifetime income options. I don’t doubt it. For too long, defined contribution plans have operated on a “good luck, you’re on your own” model at retirement. This is a step toward fixing that.

Now, let’s be clear: this isn’t the first time someone’s tried to crack the lifetime income code within 401(k) plans. The industry has been flirting with this idea since the Pension Protection Act made automatic features more common. But execution has been spotty. Some solutions have been too complicated. Others too expensive. Some couldn’t scale. Some scared participants off with the word “annuity.” And many providers didn’t want to touch lifetime income with a ten-foot pole because of the perceived fiduciary risk.

But times are changing. With SECURE 2.0 and growing regulatory nudges around lifetime income illustrations and retirement readiness, the writing’s on the wall: plan sponsors need to think about not just getting participants to retirement, but through it.

And this new alliance could help. Transamerica gains a differentiated offering. Nuveen gets to show off its investment chops. TIAA brings the annuity muscle. Participants get flexibility, professional management, and the option—not the obligation—for lifetime income. That’s a win-win-win, in theory.

Of course, the devil’s in the details. Will plan sponsors embrace this? Will advisors understand it well enough to recommend it? Will participants trust it? Time will tell. But if you ask me, the move toward embedding lifetime income in a target-date structure, especially one that’s available as a CIT, is the most promising direction I’ve seen in a while.

It’s a rare case in our industry where a legacy provider (TIAA), a money manager with scale (Nuveen), and a modern recordkeeper (Transamerica) are combining forces not just to grab market share—but to solve a problem that actually matters.

If you’re a plan sponsor looking for a way to offer more than just accumulation, this new solution is worth a serious look. Because for most participants, running out of money isn’t just a fear, it’s the fear. And we owe them more than a glorified savings account and a pat on the back.

Let’s see if this becomes more than just another product announcement—and actually a real shift in how we think about retirement income.

On July 4th, while many of us were grilling hot dogs and dodging fireworks, President Trump signed the One Big Beautiful Bill Act (HR 1) into law. Love the name or roll your eyes at it, this bill packs a massive punch for employers, especially when it comes to tax incentives tied to benefits.

From paid leave and student loan repayment to childcare credits and a whole new breed of savings accounts (hello, Trump Accounts), this legislation makes some temporary perks from the old TCJA world permanent—and adds a few new wrinkles for plan sponsors to chew on. If you offer benefits, you’re going to want to pay attention. Here’s the short version of what matters:

1. Paid Family Leave Gets Permanently Valuable

That tax credit for offering paid family and medical leave? It’s permanent now. Employers can claim a credit for a percentage of wages or insurance premiums related to leave—as long as that leave isn’t required by state or local law. If you’ve been hesitant to offer paid leave, this gives you more long-term incentive to do so.

2. Childcare Credits Expand in a Big Way

The tax credit for employer-provided childcare expenses is now juiced up to 40% (50% for small businesses), with limits that go up to $500k and $600k respectively. If you help fund or operate childcare for your employees, Uncle Sam is officially giving you a high five.

3. Telehealth + HSAs = Permanently Compatible

Telehealth services can be covered before the deductible for HDHPs, permanently. And starting in 2026, direct primary care arrangements will also be HSA-compatible. This opens up more flexibility in how you structure high-deductible health plans and wellness programs.

4. Student Loan Repayment Gets a Lifeline

That $5,250/year tax exclusion for employer-paid student loan help? It’s here to stay. So is the Section 127 education assistance limit—with inflation adjustments added. Expect this benefit to become a bigger deal for recruiting and retention.

5. Introducing… Trump Accounts

Yes, that’s the actual name. Think of them as IRAs for kids under 18, with contribution limits, employer match possibilities, and a weird (but probably well-funded) pilot program giving new parents a $1,000 credit to kickstart savings. You’ll likely hear more as providers figure out how to integrate this into benefit packages. Stay tuned—and definitely consult your tax pro before jumping in.

6. 529 Plans Can Now Cover More

Expanded uses for 529 distributions now include K-12 schooling, tutoring, therapies for students with disabilities, and credentialing expenses. A big win for parents—and a reason to remind employees to revisit their 529 strategies.

7. Bicycle Commuting Is Back (and So Is Moving Help)

Qualified bicycle commuting reimbursements are back in play—on a taxable basis. Moving expense reimbursements get special tax treatment for military and intelligence personnel.

8. ACA and Medicaid Changes: Not Immediate, But Big

There’s a long tail to the ACA/Medicaid cuts, many not felt until after the 2026 midterms. Still, fewer people on Medicaid or ACA plans could mean more folks looking to employer plans for coverage. This could affect risk pools, plan costs, and participant behavior down the line.

9. Temporary Tax Deductions for Employees

Employees can now deduct up to $25,000 for tips and $12,500 for overtime. This is temporary, but it could factor into how you communicate compensation packages, especially in service industries.

What Should Plan Sponsors Do Now?

· Talk to your providers. These changes may affect plan design, communications, and compliance in big ways.

· Review your benefits strategy for 2026. This is a great opportunity to modernize offerings and attract/retain talent.

· Stay informed. Agencies are going to be issuing regulations for the next year to sort out the details, especially around Trump Accounts and telehealth arrangements.

Bottom line: The One Big Beautiful Bill lives up to its name in scope, even if it leaves a few open questions. It gives plan sponsors more tools to build meaningful, tax-savvy benefit packages—if they’re willing to do the homework.

Stay tuned, because the devil is always in the guidance.