The Rosenbaum Law Firm P.C. Blog

The Long, Quiet Goodbye Most plan providers don’t wake up one morning and get fired. It’s not a dramatic breakup with yelling, lawyers, and a new recordkeeper waiting in the lobby. It’s quieter than that. Clients leave the way a houseplant dies—one missed watering at a time. An email sits unanswered for three days. A census comes back with the same errors as last year. The annual review becomes a reading of slides no one understands. Nobody gets angry, but nobody feels taken care of either.

Service Isn’t a Department Providers love to talk about their service model like it’s a secret sauce locked in a recipe book. The truth is simpler. Service is just doing what you said you would do when you said you would do it. When a sponsor has to send the same question twice, trust starts leaking out of the plan like air from an old tire. Clients don’t compare you to other TPAs—they compare you to the last good experience they had with anyone.

The Myth of the “Sticky” Client We tell ourselves that relationships are sticky, that changing providers is too hard, that inertia protects us. Inertia works until it doesn’t. All it takes is one sharp advisor, one payroll conversion, or one audit scare for a sponsor to realize moving isn’t impossible—it’s just paperwork.

Attention Is a Fiduciary Act Returning calls, explaining notices in English, admitting mistakes before the client finds them—these are not soft skills. They’re risk management. Sponsors judge competence emotionally long before they judge it technically. If they feel ignored, your beautiful compliance calendar doesn’t matter.

The Fix Is Boring There is no technology that replaces caring. The cure for client abandonment is embarrassingly ordinary: answer faster, write clearer, own problems, and remember that a 401(k) plan is someone’s life savings, not another account number on your dashboard.

For many plan sponsors, the story is the same. The plan was set up years ago. Employees participated. Contributions flowed. Nobody complained. From the sponsor’s perspective, the 401(k) worked exactly as intended. And for a long time, that was true.

The problem is that “working” and “holding up under scrutiny” are not the same thing.

A plan that functioned smoothly in 2004 can quietly become misaligned in 2026. Fees that once seemed reasonable drift out of range. Investment lineups stop reflecting best practices. Participant demographics change, but the plan design does not. The workforce gets younger, more mobile, and more skeptical—while the plan remains frozen in time.

What often triggers concern isn’t a slow decline. It’s an event. A key employee leaves and asks uncomfortable questions. A new CFO wants benchmarking data. A merger forces a review. Or a lawsuit headline makes its way into the boardroom. Suddenly, decisions that went unquestioned for decades are being examined through a fiduciary lens.

The dangerous assumption is that longevity equals prudence. ERISA does not reward consistency for its own sake. It rewards a prudent process, applied continuously. A plan sponsor who hasn’t revisited provider relationships, fees, or governance in years may feel loyal—but loyalty is not a fiduciary defense.

Plans don’t usually fail because they were neglected once. They fail because they were never revisited. The longer a plan goes without a meaningful review, the more expensive that first real look tends to be.

When a plan sponsor hears the words “late deposit,” they react like they’ve been accused of shoplifting. Faces turn red, voices get defensive, and someone inevitably says, “We would never steal from employees.” The truth is less dramatic and more uncomfortable. Most late deposits aren’t acts of greed. They’re acts of disorganization wearing a moral disguise.

Payroll departments are busy places. People get sick, systems crash, and someone new is asked to do a job with instructions that begin with, “Just do what Karen used to do.” Karen retired in 2019, and her process left with her. The result is a well-intentioned company making deposits whenever someone remembers instead of when the law requires. Intentions are lovely things, but the Department of Labor accepts them the way airlines accept expired boarding passes.

Sponsors imagine that a late deposit is a single event, like missing a train. In reality, it’s usually a habit. If the company takes ten days this month, it probably took nine days last month and eleven days the month before. The plan document and the regulations don’t care about averages. They care about the earliest date the money could have been separated from company assets, a concept that makes perfect sense to lawyers and almost no sense to normal humans.

The good news is that late deposits are fixable. The bad news is that the fix requires humility. You have to admit the process is broken before you can repair it. That means calendars, written procedures, and someone with actual authority checking the work. It means treating payroll like surgery instead of improv comedy.

Sponsors shouldn’t feel like criminals when this happens, but they should feel like mechanics staring at an engine that needs maintenance. The solution isn’t shame; it’s structure. Build a process that a tired human can follow on a bad day, and the moral crisis of late deposits quietly turns back into what it always was—a scheduling problem with a legal accent.

If you’ve been watching the headlines, you’ve probably heard about the new Trump Accounts—a savings vehicle created by federal law that lets kids start building tax-advantaged investment accounts early in life and gives eligible children a federal seed contribution. Employers can even contribute to the Trump Accounts of employees or their dependents starting next summer. So here’s the question sponsors should be asking: will this be a real employee benefit, or just another shiny bullet point on a benefits brochure that never actually gets used in practice?

For all the talk about financial inclusion and giving the next generation a head start, the reality is that adoption won’t happen by accident. Employers who want to put muscle behind this idea have to do more than announce that they could contribute. They have to design a written contribution program, communicate it clearly to employees with children under 18, coordinate with trustees and payroll, and navigate nondiscrimination requirements that aren’t yet fully defined. And that’s before we even get to the questions about whether older employees without children feel like second-class participants in the benefits hierarchy.

Those operational hurdles are real. Sponsors don’t need another plan that sits on a shelf because nobody understands how to use it. If a Trump account contribution program isn’t administered correctly, employers could face compliance headaches that look a lot like late deposits and failed testing: invisible until someone audits them.

That said, some large firms are already signaling interest and even pledging matching contributions. That’s promising, but it doesn’t guarantee widespread adoption. For sponsors thinking about whether to add this to their benefits lineup, the starting point isn’t marketing copy—it’s careful planning. Employers who treat Trump Accounts as a thoughtful part of the overall financial well-being strategy, rather than a gimmick, will be the ones that actually deliver value to their workforce.

If you thought your rollover notice obligations were settled a few years ago, think again. The IRS has released two new model rollover notices—one for Roth distributions and one for non-Roth distributions—and they are effective immediately. That means every plan sponsor who issues distribution paperwork now has one more item on the compliance to-do list.

Sponsors didn’t ask for a new notice, but the law changed. Laws change all the time; plans usually don’t. That gap between updated regulations and everyday operations is where most compliance problems are born. Until your forms and procedures reflect the current requirements, you are relying on yesterday’s rules to run today’s plan.

These revised notices incorporate the many changes made by SECURE 2.0 and other recent legislation. The IRS didn’t simply polish the old language. The new versions address updated early-withdrawal exceptions, revised required minimum distribution rules, and other details that affect how participants experience a distribution. In other words, this isn’t cosmetic—it’s substantive.

The requirement to provide a proper 402(f) safe harbor explanation has never been optional. If a participant is eligible for a rollover, the plan must deliver a notice that is accurate, understandable, and provided at the right time. Sending an outdated form because “that’s what we’ve always used” is not a compliance strategy. It’s a future audit finding waiting to happen.

For some sponsors, this update will be a simple replacement of one document with another. For others, it will reveal bigger questions: Who is responsible for issuing the notices? Are they being sent before the distribution request is processed? Does the recordkeeper know you’re still using old language? Those operational details matter far more than the font size on the form.

This isn’t a technicality. It’s a reminder that retirement plans live in a moving legal world. Updating the rollover notices now is easier than explaining later why you didn’t.

The Internal Revenue Service (IRS) and Department of the Treasury issued Notice 2026-13 on January 15, 2026 — a key update for retirement plan sponsors and administrators responsible for communicating rollover distribution options to participants. This guidance revises the safe harbor explanations previously provided and aligns them with recent legislative and regulatory changes.

Under Internal Revenue Code Section 402(f), plan administrators must provide participants with written explanations of their eligible rollover distribution options and the associated tax consequences before distributions occur. Notice 2026-13 updates the model safe harbor explanations, giving administrators two versions to choose from: one for distributions from non-Roth accounts and another for Roth accounts. If a participant is eligible for both, administrators should provide both explanations.

So what changed? The updated safe harbor language reflects tax law developments since 2020, including provisions of the SECURE 2.0 Act of 2022 and policy recommendations from a Government Accountability Office (GAO) report aimed at improving participant understanding of distribution choices. The revisions address:

· New and expanded exceptions to the 10% early-withdrawal penalty, such as those covering emergency expenses and terminal illness;

· Revisions to required minimum distribution (RMD) rules, including later RMD ages and rules for surviving spouses;

· Elimination of RMDs for designated Roth accounts in employer plans; and

· Structural updates like a table of contents to make notices easier to navigate.

·

Plan administrators may customize the safe harbor explanations to reflect specific plan features (for example, omitting sections that don’t apply). Using these updated explanations helps satisfy ERISA and IRS disclosure requirements while reducing fiduciary and compliance risk.

As retirement law continues to evolve, Notice 2026-13 represents an important step toward clearer, more accurate communication with participants facing rollover decisions. (IRS)

Big headlines in retirement plan litigation don’t just hit household names; they’re a reminder that fiduciary duty doesn’t come with automatic immunity for size or reputation. Last week, a $70 million ERISA class action lawsuit was filed against the Bloomberg L.P. 401(k) Plan on behalf of more than 20,000 current and former participants.

According to the complaint, plan fiduciaries allegedly failed to act prudently by retaining two investment options that underperformed their benchmarks for over a decade. Specifically, the Harbor Capital Appreciation Fund and the Parnassus Core Equity Fund stayed on the plan menu despite long-term lagging performance compared with relevant indices and peer groups. Plaintiffs say that this failure to remove imprudent investment options cost participants tens of millions of dollars in retirement savings.

This isn’t an isolated phenomenon. ERISA litigation against 401(k) plans has continued to increase, with plaintiffs’ firms seeking to hold fiduciaries accountable for underperforming funds, excessive fees, and poor governance generally.

For plan sponsors and fiduciaries, the Bloomberg case highlights several key points:

· Performance alone isn’t enough — it’s the process you follow when evaluating and removing options that matters in an ERISA challenge.

· Documentation is defense — recordkeeping of investment reviews, benchmarks, and committee deliberations isn’t optional; it’s a core part of prudence.

· Long-term lag isn’t academic — persistent underperformance relative to objective comparators can be used as evidence of imprudence.

At the end of the day, most sponsors don’t want litigation. But they do want to protect participants and their own organization. A disciplined, documented investment monitoring process isn’t just best practice — in today’s environment, it may be your best defense.

Every plan provider says the same thing: “We work with everyone.” That sounds inclusive, but it’s terrible marketing and even worse strategy. The most successful TPAs and advisors I know don’t chase everyone—they own niches. Doctors, law firms, unions, family businesses—each lives in its own financial universe with unique pain points, egos, and landmines.

Take medical practices. Physicians care about two things: reducing taxes and keeping the staff happy enough not to quit on a busy Monday. They don’t want a generic 401(k); they want cash balance combinations, creative profit-sharing formulas, and someone who can explain it without sounding like the IRS instruction booklet. If you can speak “doctor,” you’ll never run out of clients.

Law firms are a different animal. Partners think like litigators—risk first, opportunity second. They worry about fairness between rainmakers and junior attorneys, and they read every word of every document. A provider who understands partnership dynamics and compensation waterfalls becomes indispensable. One who doesn’t gets shown the door after the first uncomfortable partner meeting.

Unions? That’s about trust and politics. Decisions are collective, not top-down. Education matters more than glossy investment reports. Family businesses bring yet another twist—succession drama, relatives on payroll, owners who want maximum deductions while paying the kids minimum wages. Cookie-cutter solutions explode in those environments.

The point is simple: retirement plans are cultural, not just financial. Providers who learn the language of a niche stop selling features and start solving real problems. They know which plan design questions to ask before the prospect realizes there’s a question at all.

You don’t need a thousand markets to build a great practice. You need two or three where you sound like you belong at the table. Pick a lane, learn its quirks, and become the provider who “gets” that world. Generalists compete on price. Specialists compete on trust.

For decades the advisor sales pitch sounded like a broken record: better funds, better performance, better returns. The problem is that every advisor says the same thing, and in a world of index funds and target-date glidepaths, “better investments” isn’t a strategy anymore—it’s background noise.

Plan sponsors don’t wake up worried about alpha. They worry about failed ADP tests, angry employees who can’t get a distribution processed, and whether the Department of Labor will knock on their door. If advisors keep leading with investment charts, they’re solving a problem most sponsors don’t think they have.

The advisors winning business today compete on process, not product. They show sponsors how committee meetings should run, how fees get benchmarked, how participant education actually changes behavior, and how to document decisions so a fiduciary can sleep at night. That’s value an index fund can’t replace.

Think about what really causes sponsors to fire advisors. It’s rarely a fund trailing the S&P by 40 basis points. It’s unanswered emails, confusing payroll files, or a provider team that disappears after the sale. Service is the investment now. Governance is the differentiator.

Advisors need to sound less like portfolio managers and more like risk managers. Talk about cybersecurity. Talk about eligibility errors and late deposits. Bring a calendar that maps out the entire year—testing, notices, fee reviews, education meetings. When you help a sponsor run a better plan, the investments take care of themselves.

None of this means investments don’t matter. They do. But they’re the price of admission, not the reason to hire you. The advisor who wins is the one who walks into a meeting and says, “I’m here to help you be a great fiduciary,” instead of, “Let me show you my five-star funds.”

Stop competing on what everyone can copy. Start competing on what only a real partner can deliver: competence, communication, and a process that protects both the sponsor and the people counting on that 401(k).

Running a 401(k) plan isn’t just about picking a fund lineup and hoping employees save enough for retirement. It’s about process, documentation, and proving that you acted like a prudent fiduciary even when markets misbehave. I always tell plan sponsors the same thing: if the Department of Labor knocked on your door tomorrow, there are five documents you’d better be able to pull out of a drawer without breaking a sweat.

1. Investment Policy Statement (IPS). This is your rulebook. It explains how investments are selected, monitored, and replaced. Without an IPS, every fund change looks random and emotional. With one, you look like a disciplined fiduciary following a repeatable process.

2. Committee Charter and Minutes. If you have a committee—and you should—write down who is on it, what their responsibilities are, and how often they meet. Minutes don’t need to be a novel, but they should show that real conversations happened about fees, performance, and participant needs.

3. Fee Benchmarking Report. “Reasonable fees” isn’t a feeling; it’s a comparison. A current benchmarking report shows you checked the marketplace and didn’t just accept whatever your provider charged because it was easy.

4. 408(b)(2) Service Provider Disclosures. These tell you who is getting paid and how. If you’ve never read them, you’re flying blind. Fiduciary duty requires understanding compensation, not pretending it doesn’t exist.

5. Plan Document and Amendments. This is the constitution of your plan. Operating outside the document is the fastest way to an IRS correction program and a very uncomfortable conversation with ownership.

None of this is glamorous, but retirement plans are built on paperwork the way baseball is built on box scores. You don’t win by accident—you win by keeping records, following a process, and proving you cared. If those five documents aren’t in your drawer, let’s fix that before someone else asks why.