Just when you think the forfeiture reallocation litigation wave can\u2019t get any bigger, another suit drops. The latest target? The 401(k) plan of RTX, the company formerly known as Raytheon Technologies Corp.<\/p>\n
The case, Jacob v. RTX Corp. , was filed on August 22, 2025, by plan participants Melissa Jacob and Thomas Miller. Their lawyers, Webster Book LLP, DiCello Levitt LLP, and Miller Law Firm, are the same familiar names who\u2019ve been spearheading these forfeiture cases across the country.<\/p>\n
The Claims<\/strong><\/p>\n Like the other lawsuits in this line, the complaint isn\u2019t reinventing the wheel. The plaintiffs allege the fiduciaries violated ERISA by:<\/p>\n 1. Failing to act in accordance with plan documents.<\/p>\n 2. Breaching duties of loyalty and prudence.<\/p>\n 3. Using plan assets for the benefit of the employer.<\/p>\n 4. Engaging in self-dealing.<\/p>\n 5. Causing prohibited transactions.<\/p>\n On top of that, they allege RTX failed to monitor its Pension Administration and Investment Committees, always a catchall claim in these suits.<\/p>\n The real crux of the complaint, however, is how RTX handled plan forfeitures. Each year, fiduciaries had a choice: use forfeitures to pay plan expenses or offset employer contributions. According to the plaintiffs, RTX always picked the latter, using forfeitures to reduce its matching contributions since 2019.<\/p>\n What ERISA Says<\/strong><\/p>\n The plaintiffs make sure to cite ERISA\u2019s requirement that plan assets must be used \u201cfor the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the plan.\u201d And while RTX\u2019s plan documents apparently allow forfeitures to offset employer contributions and to pay expenses, the lawsuit zeroes in on the fact that fiduciaries never chose the expense route.<\/p>\n That\u2019s the sleight of hand in these complaints. Yes, the plan says forfeitures can reduce contributions, but the plaintiffs argue that doing so is never in participants\u2019 best interest when the employer is flush with billions in profits. In their telling, if RTX has no risk of defaulting on contributions, the \u201cright\u201d choice should always be applying forfeitures to cover expenses\u2014because otherwise those expenses come out of participants\u2019 pockets.<\/p>\n Dollars and Numbers<\/strong><\/p>\n The complaint throws around some big figures:<\/p>\n \u00b7 From 2019 through 2023, participants\u2019 accounts paid more than $25 million in administrative expenses.<\/p>\n \u00b7 During that same period, RTX reduced contributions by $18.6 million using forfeitures.<\/p>\n \u00b7 Unallocated forfeitures piled up year over year, hitting $6.6 million by 2023.<\/p>\n The plaintiffs argue that, in effect, participants lost twice: they paid expenses from their own accounts, while RTX got to lower its contributions thanks to forfeiture dollars.<\/p>\n A \u201cFlawed\u201d Process<\/strong><\/p>\n The lawsuit doesn\u2019t stop at outcomes; it also takes aim at process. The plaintiffs say fiduciaries didn\u2019t even bother to create a reasoned, impartial method for deciding how to use forfeitures. Instead, they claim RTX rubber-stamped the option that benefitted itself. That lack of process, they argue, is itself a breach of the duty of prudence.<\/p>\n In other words: not only did RTX pick the \u201cwrong\u201d option every time, but it also didn\u2019t have a documented, participant-first process for making the decision. That\u2019s the kind of allegation courts have been listening to in fiduciary breach cases.<\/p>\n What It Means<\/strong><\/p>\n Forfeiture suits have exploded in the last two years, and RTX is just the latest headline name to be dragged into court. These cases hinge on a simple but powerful point: fiduciaries must act in the best interest of participants. Even if the plan documents allow multiple uses of forfeitures, plaintiffs are arguing that prudence and loyalty demand picking the path that favors participants, especially when the employer\u2019s financial health isn\u2019t at risk.<\/p>\n For plan sponsors and fiduciaries, the lesson is obvious. If your plan allows forfeitures to offset contributions or pay expenses, you need:<\/p>\n \u00b7 A documented process for deciding how to use them.<\/p>\n \u00b7 A reasoned analysis that shows consideration of participant interests.<\/p>\n \u00b7 A clear record showing why one choice was made over the other in a given year.<\/p>\n The lawsuits may seem formulaic, but they\u2019re finding traction because fiduciaries haven\u2019t been meticulous about process and documentation.<\/p>\n My Take<\/strong><\/p>\n I\u2019ve said it before: the retirement plan industry has a habit of ignoring issues until litigation forces the change. Forfeitures were always treated as a boring back-office accounting exercise\u2014until plaintiff firms figured out there was money to be made. Now every plan sponsor should expect scrutiny.<\/p>\n The irony is that forfeitures, in theory, should benefit the plan and its participants no matter how they\u2019re applied. But in litigation land, perception matters more than theory. If it looks like you\u2019re helping the company more than the participants, you\u2019re in trouble.<\/p>\n It reminds me of the old Dallas TV show, when J.R. Ewing made decisions, they were always in J.R.\u2019s interest, never anyone else\u2019s. In the world of ERISA, that doesn\u2019t fly. Fiduciaries aren\u2019t supposed to be J.R.; they\u2019re supposed to be Bobby, always trying to do right, even when it costs more.<\/p>\n And that\u2019s the bottom line here. If you don\u2019t want to be the next RTX, you need to show you\u2019ve been acting like Bobby, not J.R.<\/p>\n <\/span><\/p>","protected":false},"excerpt":{"rendered":" Just when you think the forfeiture reallocation litigation wave can\u2019t get any bigger, another suit drops. The latest target? The 401(k) plan of RTX, the company formerly known as Raytheon Technologies Corp. The case, Jacob v. RTX Corp. , was … Continue reading