Fiduciary oversight in defined contribution plans is no longer a periodic compliance exercise. Enforcement data and litigation trends confirm it is a continuous governance obligation with measurable financial consequences.
In fiscal year 2025, the Department of Labor’s Employee Benefits Security Administration (EBSA) recovered $1.4 billion for retirement and benefit plans. Of that, $714.4 million came from 556 civil enforcement investigations. EBSA also removed 15 fiduciaries and barred 24 individuals from fiduciary service.
On the litigation side, ERISA excessive fee class action filings increased 35% in 2024, with a record 53 settlements totaling $203.3 million, according to PlanAdviser. Mayer Brown’s 2025 analysis tracked more than 50 new forfeiture lawsuits and over 60 excessive fee cases filed through October.
The DOL’s Meeting Your Fiduciary Responsibilities guidance makes clear that the duty of prudence centers on decision-making process, not investment returns. This distinction has become central to enforcement and litigation outcomes.
In the UnitedHealth excessive fee case, settled for $69 million in December 2024, the court identified the plan sponsor’s failure to evaluate investment retention over more than a decade as the core breach. The absence of a documented review process, not the investment losses themselves, drove the outcome.
The DOL’s 2026 enforcement priorities, announced in January 2026 by EBSA Assistant Secretary Daniel Aronowitz, underscore this direction: formal governance structures, documented decisions, and systematic provider evaluations.
Excessive fee claims now reach plans of all sizes. In 2024, 13 cases targeted plans with less than $500 million in assets, nine of which held less than $250 million.
The types of challenged investments are also shifting. Mayer Brown reported that stable value fund challenges increased by more than 500% in 2025 compared to 2024, overtaking target-date funds as the most frequently contested investment category. Recordkeeping fee claims remained the second most common allegation.
In the Jack Henry excessive fee case, settled for $1.6 million in 2025, the central allegation was that the plan paid more than $78 per participant annually in recordkeeping fees, substantially above comparable rates for similarly sized plans.
Target-date funds remain the dominant qualified default investment alternative. PSCA data indicates TDFs serve as the QDIA in approximately 94% of plans. Vanguard’s How America Saves 2025 report found that 67% of participants were invested in a professionally managed allocation at year-end 2024, with 60% in a single target-date fund and 7% in a managed account. Professionally managed allocation usage has grown 50% over the past decade.
The selection and monitoring of default options carries heightened fiduciary significance. The DOL’s QDIA regulations under the Pension Protection Act of 2006 provide fiduciary safe harbor, but only where sponsors select and monitor defaults through a documented prudent process.
According to Vanguard, 61% of plans offered automatic enrollment in 2024, up from 10% in 2006. Among plans with 1,000 or more participants, adoption reached 78%. Participants in auto-enrollment plans saved an average of 12.3% of compensation, including employer contributions, compared to 7.4% in voluntary enrollment plans.
The SECURE 2.0 Act requires all new 401(k) and 403(b) plans established after December 29, 2022, to implement automatic enrollment beginning with the 2025 plan year, with default rates between 3% and 10% and mandatory annual escalation of at least 1%.
In 2024, a record 45% of participants increased their deferral rate. The share of plans defaulting at 6% or higher reached 30%, nearly double the level from a decade earlier.
The Biden-era Retirement Security Rule was stayed by two federal district courts in 2024. The DOL formally abandoned its appeal in November 2025. The DOL’s 2025 regulatory agenda lists a new fiduciary rulemaking effort targeted for May 2026. Separately, in August 2025, an executive order directed the DOL to develop a framework for alternative investments in defined contribution plans; a proposed rule was filed with the OMB in January 2026.
Regardless of the specific regulatory direction, the underlying fiduciary obligations under ERISA remain unchanged: act solely in participants’ interests, exercise the care of a prudent professional, diversify investments, and follow plan documents.
Fiduciary process in 401(k) plan management is no longer evaluated in isolation. Enforcement recoveries, litigation volume, and regulatory evolution all point in the same direction: documented governance, systematic fee oversight, and evidence-based plan design are the operational baseline.
Better plan governance starts with the right structure and the right partners. Whether you’re a plan sponsor or a participant, Siebert has the tools and expertise to help.
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