Fiduciary Hot Topics | Q3 2025

We want to ensure that you as a retirement plan advisor are on top of what's new and upcoming in the retirement planning space, which is why we have our quarterly Fiduciary Hot Topics. Your plan sponsors may bring these topics up with you, but on this page, you will learn how to position these discussions with them and be prepared. This quarter's edition is straight out of the RPAG oven and features Employee Benefits Security Administration (EBSA) enforcement efforts, what to expect for 2025, a Cornell Case that could pave the way for more ERISA litigation claims, and recent developments in ERISA forfeiture litigation.

EBSA 2024 Enforcement Efforts and Trends/Tips for 2025

The Employee Benefits Security Administration (EBSA), the Department of Labor (DOL) sub-agency which oversees ERISA regulation of retirement plans, recovered nearly $1.4 billion for employee benefit plans, participants, and beneficiaries in FY 2024, according to the EBSA’s annual enforcement fact sheet. (The Department of Labor operates on a fiscal year beginning on October 1 and ending September 30; e.g., October 1, 2023, through September 30, 2024.) EBSA oversees 2.6 million health plans, 801,000 private pension plans, and 514,000 other welfare benefit plans, covering 156 million individuals. 

Monetary Recoveries by Source

EBSA received nearly 200,000 informal participant and beneficiary complaints through its website and phone calls. Seventy-one percent of the plans investigated were faulty, requiring plan sponsors to restore losses and/or take other corrective action. TIP: Most investigations start because of participant complaints and faulty Form 5500 filings. Delinquent Filer Voluntary Compliance Program (DFVCP) applications increased in FY 2024, reflecting growing engagement with voluntary corrections. 

Daniel Aronowitz, the nominee to lead EBSA, testified at his hearing that he plans a robust agenda to:

• Provide regulatory clarity,
• Improve EBSA’s enforcement of fiduciary law, and
• Encourage plan sponsors to expand access to retirement and health care benefits.

While we expect that EBSA will continue to pursue bad actors who mismanage retirement assets, Mr. Aronowitz emphasized the need to encourage employers to expand retirement and health care benefits to America’s workers through even-handed enforcement and regulatory guidance. Mr. Aronowitz noted that EBSA “will end the practice of open-ended investigations that go on for years” and will work with Congress “for legislative changes needed to end litigation abuse.” 

Cornell Case Could Pave Way for More ERISA Litigation Claims

On April 17, 2025, the United States Supreme Court issued a decision in Cunningham v. Cornell University that may make it easier for plaintiffs to bring ERISA claims for violation of the “prohibited transaction” rules. ERISA’s prohibited transaction rules are designed generally to protect plan participants from transactions that could give rise to conflicts of interest. For example, it is a prohibited transaction for a fiduciary to cause a plan to engage in a transaction with a service provider, but there is a corresponding prohibited transaction exemption that permits such transactions if the services were necessary for the operation of the plan and no more than reasonable compensation was paid.

Recent Developments in ERISA Forfeiture Litigation

In Hutchins v. HP Inc., No. 5:23-cv-05875-BLF (N.D. Cal. Feb. 5, 2025), a federal court in California granted a motion to dismiss a lawsuit that plan fiduciaries violated their ERISA duties by using forfeited plan assets (e.g., the non-vested employer contributions in a terminated, former employee’s account) to reduce employer contributions, rather than pay administrative costs the plan charges to plan participants.

This case is part of a broader trend of class action ERISA lawsuits challenging the use of forfeitures. In general, plaintiffs in these cases allege that employer plan fiduciaries breach their fiduciary duties and engage in self-dealing in violation of ERISA when it is decided to use forfeitures to reduce employer contributions rather than increase participant benefits by paying administrative costs otherwise charged to plan participants.

You can find the downloadable and auto-branded versions of the Q3 2025 Fiduciary Hot Topics in the RPAG Resource Center under "Newsletters & Memos > Fiduciary Hot Topics."

This material is provided for general and educational purposes only.  It is not intended to provide legal, tax, fiduciary or investment advice.  If you are seeking legal, tax, or fiduciary advice, consult an appropriate professional.  This information does not create a professional or fiduciary relationship with Great Gray Trust Company, RPAG, or any of its representatives.
 
Retirement Plan Advisory Group, LLC (“RPAG”) provides technology, solutions and services for a fee to its customers, who are primarily retirement plan advisors and associated institutions. The services include ratings of various third-party investment vehicles based on RPAG’s proprietary quantitative and qualitative scoring methodology. The investment vehicles do not pay to be evaluated and scored; nor do the companies that provide services to the investment vehicles pay for them to be evaluated and scored, but those companies may have commercial relationships and affiliations with RPAG.
 
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