PODCAST: Williams Mullen's Benefits Companion - Big Changes to Catch-Up Contributions in 2025
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#WorkforceWednesday: SECURE Act 2.0 - What 401(k) Plan Sponsors Need to Know - Employment Law This Week®
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Since September 2023, ERISA plaintiff’s firms have filed approximately 60 class action lawsuits challenging the longstanding practice of plan sponsors using plan forfeitures to offset their employer contributions in 401(k)...more
On July 9th, the Secretary of Labor filed an amicus brief with the Ninth Circuit relating to the appeal of Hutchins v. HP, Inc. In that case, a participant claimed that forfeitures should have been used to offset plan...more
There has been a recent uptick in ERISA class actions challenging the use of 401(k) plan forfeitures. Forfeitures are employer contributions that participants forfeit when they leave employment before those contributions vest...more
The Wagner Law Group continues to monitor the ongoing flood of “forfeiture” litigation. This alert is our seventh reporting on and analyzing the nature of the claims raised by plaintiffs, the defenses asserted against them,...more
Forfeiture funds in 401(k) plans represent a unique asset pool with specific regulatory requirements and practical applications. Forfeiture funds arise when participants terminate employment with the company before becoming...more
BAE Systems Inc. has won a class action lawsuit about misusing 401(k) plan forfeitures. U.S. District Judge Anthony Trenga, of the U.S. District Court for the Eastern District of Virginia, granted BAE’s motion to dismiss...more
On September 19, 2024, the Southern District of California dismissed claims brought by a 401(k) plan participant against Thermo Fisher Scientific Inc. regarding the use of forfeitures to offset future employer contributions. ...more
Recently had a client going through an Internal Revenue Service (IRS) audit and while talking to an agent, they didn’t disagree with my theory that the idea of being able to reduce employer contributions through forfeitures...more
Last year, we alerted you to the filing of several class action lawsuits alleging that plan fiduciaries violated their duties of prudence and loyalty under Title I of ERISA by using forfeitures to reduce employer...more
Recent developments spotlight issues with forfeiture and other unallocated accounts in defined contribution retirement plans, such as 401(k) plans: •The IRS has set the deadline for plan forfeiture use. •Participants in...more
Last year, we alerted you to the filing of several class action lawsuits alleging that plan fiduciaries violated their duties of prudence and loyalty under Title I of ERISA by applying forfeitures to reduce employer...more
Conflicting orders on motions to dismiss from two California courts foreshadow issues for a new theory of ERISA liability. Employers have faced a recent wave of novel ERISA class actions that challenge the reallocation of...more
Again, litigators are trying to create class action lawsuits against large plans. This time, I think they’re scraping the bottom of the barrel....more
The IRS recently issued Proposed Regulations that clarify and update existing rules governing how and when forfeitures must be used in qualified defined contribution (e.g., 401(k)) and defined benefit retirement plans. ...more
This Client Advisory highlights important developments in the law governing employee benefit plans and executive compensation over the past year. It offers insight into what these developments mean for employers and plan...more
Use of Forfeitures for Safe Harbor Contributions, QNECS and QMACS - The Internal Revenue Service (IRS) recently issued final regulations allowing forfeitures in 401(k) plans to be used to fund safe harbor contributions,...more
The IRS recently finalized regulations that allow 401(k) plans to use forfeiture money to fund qualified non-elective contributions (“QNECs”) and qualified matching contributions (“QMACs”). ...more
The Internal Revenue Service (IRS) has ruled that forfeitures under 401(k) plans can now be used to make qualified nonelective contributions (QNECs) and qualified matching contributions (QMACs) to 401(k) plans. This recent...more
Forfeitures that occur when people terminate service from retirement plans is usually a problem when the plan sponsor and their providers forget about them. Whether forfeitures are used to pay expenses, reduce employer...more
Some of our employer client sponsors of pre-approved 401(k) plans have contacted us regarding plan amendment notices received recently from their prototype or volume submitter plan document sponsors relating to the expanded...more
We are pleased to bring you some good news for 401(k) plans from the IRS. The IRS just issued a proposed regulation that allows safe harbor contributions to a 401(k) plan, or employer contributions used to correct a...more
On January 18, 2017, the IRS issued proposed regulations that expand the permitted uses of forfeitures in a 401(k) plan. Under the proposed rules, the definitions of “qualified nonelective contributions” (QNECs) and...more
On January 18, 2017, the IRS issued proposed regulations allowing amounts held as forfeitures in a 401(k) plan to be used to fund qualified nonelective contributions (QNECs) and qualified matching contributions (QMACs). This...more