The Rosenbaum Law Firm P.C. Blog

The just-released 25th Edition of the 401k Averages Book confirms what many of us on the fiduciary side have known—and preached—for years: fees continue to fall, but not evenly. While this is welcome news, it’s also a wake-up call for those who still haven’t benchmarked their plans in the last few years.

Investment-related fees dropped between 0.02% and 0.12%, depending on plan size. Recordkeeping fees inched downward, in some cases by 0.03%, driven by fierce pricing competition and heightened fee transparency demands from sponsors, participants, and yes—plaintiff’s lawyers.

Advisor fees? Largely flat or slightly down, averaging a 0.01% decrease. That’s consistent with what I’ve seen in my own practice: fee compression is real, and fiduciaries who don’t regularly test their plan pricing against the market are either asleep at the wheel or setting themselves up for trouble.

And here’s the punchline: smaller plans still get the short end of the stick. A $5 million plan is paying 1.08% in total costs, while a $50 million plan pays 0.76%. Advisor comp alone drops from 0.37% to 0.16% as plan size scales. If you’re a small employer reading this, don’t assume your costs are “reasonable” just because no one’s complained—benchmark, document, repeat.

The 25th Edition includes 24 plan scenarios, helping plan sponsors see how their plan stacks up. One stat jumped off the page: a $1 million plan with 100 participants can cost anywhere from 0.87% to a staggering 3.56%, depending on the provider and fee structure. That’s a lawsuit waiting to happen.

As always, kudos to Joseph Valletta, CFA, and the team at Pension Data Source for providing this indispensable benchmarking resource. For fiduciaries, ignorance is not bliss—it’s liability.

I’m not anti-life insurance. In fact, I have life insurance, and I believe it’s one of the most important financial tools out there for protecting your loved ones. But when it comes to stuffing life insurance into a 401(k) plan, I have some strong reservations—and those reservations are grounded in reality, not theory.

Let’s be clear: I’ve seen what goes wrong when someone tries to get too clever with life insurance in a qualified plan. Sure, there are consultants and insurance agents who will spin it as an executive benefit strategy or a way to build cash value in a tax-deferred wrapper. But when the rubber meets the road, these arrangements often blow up in the face of the plan sponsor—and it’s the kind of explosion that can cost you the qualified status of your plan.

I’m not going to go into the defined benefit plan disasters where the plan is nothing more than a shell to pay insurance premiums—though I’ve seen enough of those trainwrecks to fill a chapter in a compliance horror storybook. I want to talk about what I see in 401(k) plans.

Problem #1: Discrimination Issues

Too many times, the life insurance component is offered only to company owners or a select group of executives. That’s a benefit, right, and feature. And if that benefit isn’t available to the rest of the plan participants, guess what? You’ve got a discriminatory feature that can cause a compliance failure. A 401(k) plan isn’t a private club for the C-suite. If you want to offer life insurance, it better pass coverage testing and be nondiscriminatory. Otherwise, you’re playing games with your plan’s tax qualification.

Problem #2: Titling the Policy

Here’s another compliance grenade I see too often: the insurance policy is titled directly in the name of the participant. That’s a problem. When an asset is held in a 401(k) plan, it needs to be held by the plan. If the policy is titled in the participant’s name without clearly being owned by the plan, you’ve just crossed into prohibited transaction territory. ERISA doesn’t play around with this stuff.

It’s not enough to say “Well, it’s in the plan documents.” It has to be executed properly—ownership needs to be in the name of the plan, there must be clear documentation, and it must comply with DOL and IRS rules. Otherwise, you’ve just created a liability where there didn’t need to be one.

Problem #3: Nobody Knows What They’re Doing

Let’s be honest. Most of the life insurance in 401(k) plans that I’ve seen was pitched by someone who didn’t fully understand the ERISA ramifications. This is not a plug-and-play product. If you’re not working with a team that understands both qualified plans and the nuances of insurance within those plans, you’re asking for trouble.

Look, I’m all for creativity in plan design when it serves participants, complies with the law, and avoids risk. But stuffing life insurance into a 401(k) plan because someone convinced the business owner it’s a slick tax shelter? That’s not creativity—that’s negligence.

Final Thought

If you’re a plan sponsor, keep it simple and compliant. Don’t chase shiny objects. Focus on good providers, reasonable fees, and a prudent process. That’s what ERISA demands—and that’s what protects your plan and your business.

And if you still want to put life insurance into a qualified plan? Fine. Just make sure your advisor actually knows what they’re doing. Because the IRS and DOL won’t accept “We didn’t know” as a defense.

There’s a hard truth in life, and I learned it the long, slow, and silent way: if you don’t speak up for yourself, you’ll be passed over, stepped on, and probably volunteered to clean up after someone else’s kugel spill.

As I wrote in Full Circle, back in my teenage years at Young People’s Synagogue at East Midwood Jewish Center, I played the role of the dutiful nice guy. You know, the one who showed up early, stayed late, and never got the title—kind of like the unpaid intern who’s somehow also your carpool ride.

Leadership roles were doled out like parts in a high school musical directed by someone’s passive-aggressive older cousin. The person assigning them? A college student named Adam. And every year, Adam gave me the same role: guy who does everything and gets nothing. He made people co-officers who didn’t even show up. He passed me over for president like it was a sacred tradition.

And what did I do? Nothing. I sat there quietly, like a mensch with a clipboard, smiling through clenched teeth and rationalizing, “Maybe next year.” Spoiler: next year never came.

Fast forward a couple of decades, and the stakes are a little higher now than who leads Shabbat announcements. I’m running my own law firm, negotiating retainers, and trying to deliver ERISA compliance without losing my mind—or my voice.

So when a client recently slighted me, again and again—ignoring my reasonable request to revise a retainer agreement—I remembered Adam. And I remembered that feeling. The one where you know you’re being taken for granted, but you stay silent because it’s easier.

Only this time, I wasn’t seventeen.

This time, I said something. Actually, I said everything. I warned one of the client’s employees, “I’ve got one foot out the door.” A week later, I picked up the other foot and walked.

I quit. And it felt… amazing. Liberating. Like finally being promoted to president of a synagogue you no longer care about.

Here’s the truth: no one’s coming to rescue you. No one’s handing you the title, the recognition, or the revised contract. If you’re waiting for fairness to find you, it’s probably stuck in traffic behind a bar mitzvah procession.

So speak up. For your fees. For your worth. For your teenage self who should have gotten the gavel instead of the handout flyer duty.

Because being silent doesn’t make you righteous—it just makes you invisible.

Let me be honest: most fiduciary training out there is about as exciting as watching paint dry in a compliance office. It’s often a checkbox exercise—generic, outdated, and completely divorced from the real-world problems that retirement plan fiduciaries face every day. So when Josh Itzoe, a name many of us in the industry respect, launches something new and calls it “Fiduciary U,” it’s worth taking a closer look.

Josh isn’t just another talking head in the retirement space. He built his reputation as a co-founder of Greenspring Advisors, authored two best-selling books, and now runs FiduciaryWorks, a platform many advisors rely on for plan governance. With Fiduciary U, he’s doing something our industry desperately needs: delivering real fiduciary education in real time—without wasting everyone’s time.

Here’s the pitch, and frankly, it makes sense:

“Everybody talks about fiduciary training, but most of it is basic, boring and outdated.” – Josh Itzoe, via LinkedIn

He’s not wrong. Most of what passes for training is a liability shield, not a learning experience. Fiduciary U flips that on its head with bite-sized, on-demand content that committee members can actually finish—and understand—before their next quarterly meeting.

Courses like these aren’t just relevant; they’re essential:

· Fiduciary Training Essentials (30 mins)

· Making “Cents” of Retirement Plan Fees (14 mins)

· ERISA Litigation Trends from 2024 (12 mins)

· Cybersecurity for Plan Sponsors and Participants (13–15 mins)

In an environment where ERISA litigation is rising, cybersecurity is a daily risk, and fee compression is squeezing everyone, this is the kind of practical education that separates the real fiduciaries from the people who just show up to committee meetings for the muffins.

Fiduciary U is also 24/7, which means committee members can train on their own schedule—nights, weekends, during lunch, even between Zoom calls. No more excuses. No more “we’ll get to it next quarter.”

Most importantly, it scales, and it’s affordable, making it accessible for both large corporate plans and the small businesses who usually get stuck with a laminated fiduciary checklist and a prayer.

Here’s the bottom line: If you’re a retirement plan sponsor, committee member, or advisor, Fiduciary U gives you no excuse to remain uninformed. And if you’re not prioritizing fiduciary education, you’re not just behind—you’re vulnerable.

Training isn’t just a best practice. It’s a risk management strategy. And in 2025, it better be a priority.

Another week, another Adams v. Goliath story in the world of ERISA litigation—and this time, Goliath is Cigna. The company is now facing its second lawsuit in as many months over how it handled forfeitures in its $13 billion 401(k) plan. If you’re a fiduciary—or advise one—pay attention. These cases may seem like déjà vu, but they’re sending a very loud and clear message: the era of sloppy fiduciary oversight is over.

Let’s break this one down.

Three former Cigna employees are alleging that the company misused over $17 million in forfeited 401(k) assets to offset its own matching contribution obligations. The plaintiffs claim this violated ERISA’s fiduciary duties and self-dealing prohibitions. Their logic? Once the money leaves a non-vested employee’s account and hits the plan’s forfeiture bucket, it becomes plan money, and should be used for plan purposes—like paying for administrative expenses or reallocating to participants—not for helping the company’s bottom line.

Cigna, of course, disagrees. They’ve said they’ll “defend the company vigorously,” which is corporate PR speak for “this is going to be expensive.”

But here’s the kicker: the IRS has said that using forfeitures to reduce employer contributions is legal, within certain limits. In fact, that was reaffirmed in 2023. So why all the lawsuits? Because legality under the Tax Code isn’t the same thing as prudence under ERISA’s fiduciary standards. If a plan document says forfeitures should be used a certain way, or if the fiduciaries never even considered using them to reduce fees for participants, then they’re vulnerable—no matter what the IRS says.

Let’s not forget: this is the second lawsuit Cigna has faced recently. The other alleges they kept participant assets in underperforming stable value options and again misused forfeitures. Where there’s smoke, there’s often a fiduciary committee that hasn’t read its plan document in a while.

A few takeaways for plan sponsors and advisors:

1. Forfeitures are not free money. They’re plan assets. Treat them with the same care as participant contributions.

2. Document your decision-making. If you’re using forfeitures to offset contributions, make sure the plan permits it, and document why you chose that route over other alternatives.

3. Read your plan document. I shouldn’t have to say this, but clearly, some committees aren’t doing it.

4. Benchmark everything. Fees, investments, processes—even how you handle forfeitures.

With over 93,000 participants and $13 billion in plan assets, Cigna’s plan isn’t just a retirement vehicle—it’s a litigation magnet. But the lessons apply just as well to the $10 million plan down the street. ERISA doesn’t care about your size—it cares about your process.

And if your process stinks? The plaintiffs’ bar is more than happy to help you improve it—at a steep cost.

As always, don’t let litigation be your wake-up call. Be proactive. Be prudent. Be a fiduciary.

In any service industry, there’s a wide range of quality and pricing. People often tell me I focus too much on third-party administrators (TPAs), but that’s where I’ve spent a lot of my career—as an ERISA attorney and former TPA employee. I know the business inside and out.

I get asked all the time, “Ary, do you work as a TPA too?” My answer is always no—and it’s simple: I respect the work TPAs do way too much to jump into their lane. It’s not just about pushing paper; it’s complicated, and it requires real expertise. The good ones get too little credit and too much blame.

What I see, time and again, is a huge difference in service quality—far beyond just price. Take one of my clients, for example: stuck with a TPA that’s really just an insurance company in disguise. They sold the client life insurance policies the company couldn’t afford and set up a “special” sub-trust that the IRS no longer recognizes as special. That’s not administration—that’s selling snake oil.

Now the client is trying to get out of a plan that’s a half million dollars underwater. A new TPA who actually knows their business took one look and said, “This should have been wound down years ago. Why didn’t the old TPA tell you that?” Well, because the old TPA wasn’t really in the administration business—they were in the insurance sales business. And terminated plans don’t pay fees or premiums, so it’s no surprise they dragged their feet.

When it comes to choosing a TPA, price matters. But it’s service quality that makes or breaks the whole deal. A cheap TPA who can’t—or won’t—give you honest, proactive advice will cost you more in the end. The right TPA is a partner, a trusted advisor who knows ERISA, knows your plan, and is looking out for your best interest.

That’s why I focus on the good TPAs, and why I don’t try to be one myself. Let the experts handle their side of the business—and hold them accountable.

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.