Written by Janel Cross, Managing Partner
May 6, 2025

Quick Takes

  • Sponsors Prioritize Education: Increased focus on financial wellness and income solutions.
  • DOL Action Required: Lost and Found Database reporting now live.
  • SECURE 2.0 Rollout Continues: Auto-enrollment, part-time eligibility, and catch-ups.
  • Litigation Watch: Fee monitoring and forfeiture usage under scrutiny.

Spotlight: Education, Advice & In-Plan Income

Market volatility, financial stress, rising healthcare costs… these things and more may be drivers for the shift toward delayed and phased retirement. And, HSAs, long seen as just a way to budget for healthcare, are now being embraced as a smart tool for retirement savings. This is leading plan sponsors to increase their focus on employee education, comprehensive financial wellness programs and in-plan income options.

Align Supports You By:

  • Designing education and wellness strategies tailored to your workforce.
  • Facilitating strategic discussions around in-plan income options and longevity planning.

Trend: Investment Lineup Trends: TDFs, CITs & Managed Accounts

With evolving participant needs and fee sensitivities, sponsors are reassessing investment options. Target date funds remain a top choice. Collective Investment Trusts (CITs) offer potential cost savings but require due diligence. Managed accounts provide tailored advice, with higher fees and complexity.

Align Supports You By:

  • Helping evaluate investment structures aligned with participant profiles and plan goals.
  • Conducting deep, ongoing due diligence on CITs and managed accounts.

Regulatory Update

Action Required: New Lost and Found Database, Reporting Required

The DOL’s Lost and Found database mandates sponsors report participants age 65+ with unclaimed benefits.

Align Supports You By:

  • Coordinating data collection and submission using the DOL’s required format.
  • Setting up repeatable internal processes to support ongoing compliance.

Now In Effect: SECURE 2.0 Rollout Continues

Key provisions took effect 1/1/2025 including mandatory automatic enrollment for new plans, shortened eligibility for part-time employees to two years of service, and enhanced catch-up contribution limits for participants ages 60-63.

Align Supports You By:

  • Reviewing your plan’s compliance with new rules.
  • Updating employee communications and enrollment procedures.
  • Promoting catch-up opportunities where applicable.

Litigation Update

Fee Benchmarking Remains Front and Center

Recent cases reinforce that plan sponsors must demonstrate active fee oversight and documentation of prudent decision-making.

Align Supports You By:

  • Conducting comprehensive benchmarking studies.
  • Documenting the process and helping justify fee structures.

Use of Forfeited Funds Under Scrutiny

Litigation continues regarding the proper use and accounting of forfeited participant funds. Misuse or failure to apply forfeitures according to plan terms can increase fiduciary risk.

Align Supports You By:

  • Reviewing plan provisions and ensuring compliance with forfeiture usage rules.

Takeaways from Recent Settlements

Fiduciary oversight, documentation, and early risk detection are critical. While overall settlements are declining, smaller plans are increasingly targeted.

Align Supports You By:

  • Maintaining strong fiduciary records—meeting minutes, IPS updates, and monitoring.
  • Partnering proactively to identify and mitigate potential issues before they arise.

What Align is Watching

  • Regulatory focus on in-plan income solutions and participant transitions into retirement.
  • Potential tax policy shifts impacting retirement incentives.
  • Ongoing legislative efforts to expand access and participation.
  • Proposals aimed at reducing ERISA litigation exposure.

You’re Never Alone with Align

With over 60 years of combined experince, we can do a lot to help you understand and gain more from your 401k. Explore what’s possible…