"As the default investment option in most retirement plans, TDFs typically hold the majority of plan assets -- yet many employers fail to evaluate them regularly, even as market conditions, participant demographics and fee structures continue to evolve. A TDF that was appropriate four years ago may now be underperforming, restructured or overpriced. In fact, average expense ratios have dropped significantly, especially for index-based and collective investment trust versions.1" MORE >>
"The number of new forfeitures cases has increased year over year, with five cases filed in 2023, 30 cases filed in 2024, and 43 cases filed so far in 2025 ... Cunningham has not yet resulted in a material increase in recordkeeping fee challenges or ERISA excessive fee lawsuits.... [S]table value funds have been the primary target in excessive fee lawsuits this year and investment challenges have significantly outnumbered recordkeeping fee challenges.... [There is] a trend toward lower settlements, including a growing number of six-figure settlements. " MORE >>
"According to the lawsuit, the firm allegedly permitted high administrative and investment management fees that disadvantaged the participants, without adequate due diligence to explore better options. It suggests that Husch Blackwell's oversight or lack thereof led to unnecessary financial burdens on employees participating in the 401(k) plan." [Paetkau v. Husch Blackwell LLC, No. 25-0721 (W.D. Mo. complaint filed Sep. 16, 2025)] MORE >>
"In its analysis of the testimony of the plaintiffs' experts, the court noted several areas of concern, concludng that one expert's conclusions were largely based on personal experience, not industry practices, and relied on 'approximations, generalities, and personal examples' instead of 'demonstrable data.' The court also pointed out the other expert's lack of familiarity with documents he claimed to rely on in forming his expert opinions." [McDonald v. Laboratory Corp. of Am. Holdings, No. 22-0680 (M.D.N.C. Aug. 12, 2025)] MORE >>
"According to the filing, Empower leveraged its role as recordkeeper for employer-sponsored retirement plans to harvest confidential participant data and then target individuals, particularly those nearing retirement or with large balances, for sales pitches. The plaintiffs allege sales representatives falsely portrayed Empower's 'managed account' program ... as the only recommended investment option."' [Williams‑Linzey v. Empower Advisory Group, LLC,
No. 25‑14660 (D.N.J. complaint filed Aug. 15, 2025) MORE >>
"Another 401(k) plan has been charged with a fiduciary breach quadfecta: excessive recordkeeping fees, expensive managed account charges, a poor performing stable value option -- and offsetting employer contributions with forfeitures." [(Babinski v. Siemens Energy Inc., No. 25-3381 (S.D. Tex. complaint filed Jul. 22, 2025)] MORE >>
"[O]ver the past 20+ years, public pensions, under pressure to meet high assumed returns (often ~7%), have embraced private equity for its historically higher reported returns versus public markets. These funds have universally underreported risks and fees (especially performance fees) and overstated investment performance by accepting rosy valuations from private equity managers." MORE >>
"If a plan fiduciary is looking for little or no services for the participants and the simplest of investments, then lowest cost may be the right cost. But if they are looking to provide a robust set of services ... and to offer investments that will provide, for example, guaranteed retirement income, then lowest cost isn’t right.... [Of] six key retirement assumptions, decreasing fees has the least impact on the investor’s retirement readiness ratio." MORE >>
"The [DOL] has issued an advisory opinion rescinding its 2023 approval of Citigroup Inc.'s Diverse Asset Manager Program, through which the bank commits to pay all or part of the fees of diverse asset managers for [ERISA] benefits plans it sponsors.... EBSA also stated that Citi's claim that its racial equity program may benefit the company because certain stakeholders might look favorably upon it is not a justification for violating the law." MORE >>
"[U]nder the Racial Equity Program, Citi pays 'all or some' of the investment management fees for 'Diverse Managers' if they are retained by Citi's own ERISA covered employer-sponsored benefit plans.... Advisory Opinion 2023-01A assumed that the Racial Equity Program was lawful and went on to discuss fiduciary issues that follow from that assumption. But the Racial Equity Program is not lawful -- its allocation of benefits on the basis of race clearly and unambiguously violates the civil rights laws.... Citi should take immediate action to end all illegal activity within its Racial Equity Program and any other initiative, plan, program, or scheme it operates under the banner of diversity, equity, and inclusion. ERISA does not shield Citi or the fiduciaries of the Plans from the application of the civil rights laws." MORE >>
"[A]llowing collective investment trusts (CITs) in 403(b) plans could save the median plan participant about 0.08% to 0.09% annually compared to mutual fund fees -- translating into $23,000-$28,000 less paid in fees by age 65 for someone earning $74,000 a year. That's enough to cover six months of living expenses in retirement for one person." MORE >>
"With hundreds of annuities in the market to choose from, some will cost you more than others. It doesn't help that there are a variety of potential fees from administrative costs to commissions that can be hard to spot and will ultimately impact your payouts. How much is too much when it comes to fees, and how do you know if you're paying too much?" MORE >>
22 pages. "At year‑end 2024, 401(k) plan assets totaled $8.9 trillion, with 38 percent invested in equity mutual funds. In 2024, 401(k) plan participants who invested in equity mutual funds paid an average expense ratio of 0.26 percent....The mutual fund expense ratios that 401(k) plan participants incur have declined substantially since 2000.... Employers and employees generally share the costs of operating 401(k) plans." MORE >>
"Despite the challenges, 403(b) plans have had success with annuities, which could offer plan sponsors of 401(k) plans solace to adopt the products. But research by the U.S. Government Accountability Office, indicated the high cost of annuities in 403(b) plans.... [D]ifferences in the participant base between 403(b) and 401(k) plans make it difficult for the defined contribution space to broadly apply lessons from annuity use in 403(b)s plans." MORE >>
"Interpretive Bulletin 75-2 ... provided the DOL's views on whether a 'party in interest' has engaged in a prohibited transaction with an employee benefit plan where the party in interest has engaged in a transaction with an entity in which the plan has invested.... Interpretive Bulletin 75-6 related to ERISA section 408(c)(2) and whether a plan could make an advance to a fiduciary to cover expenses to be properly and actually incurred by such person in performing duties with respect to the plan.... Interpretive Bulletin 75-10 ... addressed ambiguity arising from the joint jurisdiction of the Department and IRS with respect to parallel provisions in title I of ERISA and the Code.... [T]he DOL believes the interpretive bulletins are no longer needed, and if left on the books, add potential confusion and unnecessary complexity.... This direct final rule removes these obsolete interpretive bulletins prospectively as of the effective date and has no effect on their legal effectiveness prior to that date." MORE >>
"In a study of over 50,000 corporate 401(k) plans, 99% were found to have at least one fund with a cheaper, higher-performing alternative available to plan participants.... Using fund performance from the last 10 years, the study found that 94% of plans contained at least three funds with cheaper and higher-performing alternatives, while 85% had at least five other alternatives. Over 70% had at least 10 funds over three- and five-periods, and more than 40% contained at least 10 funds over a period of 10 years." MORE >>
"Participants of the National Rural Electric Cooperative Association's retirement plan filed a complaint against the organization alleging years of financial mismanagement and self-dealing in the administration of NRECA's 401(k) Pension Plan.... The complaint also accuses NRECA of manipulating internal cost-sharing structures to shift an increasing financial burden onto the 401(k) plan, while reducing costs to its other benefits programs." [Mullins v. National Rural Electric Cooperative Association [NRECA], No. 25-0994 (E.D. Va. complaint filed Jun. 11, 2025)] MORE >>
"[F]inancial advice has evolved with technological advancements and a greater focus on financial planning, with the Assets Under Management (AUM) fee emerging as the primary compensation model. Now, as financial advisers expand their services beyond traditional planning into more holistic, personalized advice, the very definition of financial advice continues to evolve. As a result, firms must continually reassess how they structure their fees to align with their growing range of services." MORE >>
"The court reasoned that the complaint did not state a claim because it lacked detailed factual allegations showing that comparable recordkeeping services were available to the Plan at a lower price." [England v. Denso Int'l Am. Inc., No. 24-1360 (6th Cir. May 6, 2025)] MORE >>
"Unlike the 401(k) retirement plans offered to private sector workers, the 403(b) plans that nonprofit workers use typically cannot access low-cost collective investment trusts (CITs).... Compounded over a 40-year career, the cost gap results in about $23,000-$28,000 less retirement wealth at age 65.... Allowing 403(b) plans to include CITs as fund options will level the playing field for all retirement savers. " MORE >>
"The industry is slowly but steadily drifting away from what matters most: the people in the plan. As independent advisors, we've always believed that retirement plan fiduciaries should act with a singular focus: doing what's best for participants. But today, that focus is diluted by the structure and incentives of many advisory firms." MORE >>
"Transparency and simplicity are the primary reasons why fiduciaries find using zero-revenue funds advantageous. However, to fully benefit from them, it's important to understand how revenue sharing works.... The inequity associated with revenue sharing makes fee-levelization a critically important feature for plan sponsors to consider. However, ... it does not solve the issue of transparency, and the administrative aspects are complex." MORE >>
"[T]he suit alleges that the TIAA Defendants have kept in the Plans their proprietary in-house managed funds with a higher-cost share class when a lower-cost share class was readily available, resulting in the Plans paying higher fees than they otherwise would have paid for investing in the exact same funds.... [T]he suit claims that since 2009, this fund has underperformed its stated benchmark by over 186%." [Byrne v. Teachers Insurance and Annuity Association of America (TIAA), No. 25-4228 (S.D.N.Y. complaint filed May 20, 2025)] MORE >>
"[The first part of this article] analyzes why plaintiff-participants bear the burden of proof on liability, causation and damages under ERISA, and why the Solicitor's and DOL's historical burden-shifting position is wrong. The second part ... addresses the additional issue of objective prudence that is often missed in ERISA causation analysis.... A proper application of the objective prudence inquiry to ERISA investment challenges is the only way to stop the litigation abuse challenging any investment option that does not meet the investment return in hindsight of top-performing investments." [Pizarro v. Home Depot, No. 22-13643 (11th Cir. Aug. 2, 2024; cert. pet. filed Dec. 3, 2024; Solicitor General brief requested Apr. 21, 2025)] MORE >>
