The Daily Brief for Benefits Professionals
BenefitsWire
Retirement Plans
August 4, 2026
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18 items · ~5 min read
Top of the Brief
Two Appellate Courts Apply a Deferential Standard of Review in Recent ESOP and 401(k) Class Action Lawsuits“Recently, the Courts of Appeal for the Third and Seventh Circuits held that courts must also apply the abuse of discretion standard of review to class action claims brought under ERISA Section 502(a)(2) that challenge investment decisions made by discretionary fiduciaries for 401(k) plans and employee stock ownership plans. See In re Quest Diagnostics ERISA Litig., 179 F.4th 217 (3d Cir. 2026); see also Rush v. GreatBanc Tr. Co., — F.4th —, 2026 WL 2071139 (7th Cir. 2026). The standard of review matters. All else equal, the more deferential the standard, the more likely a court will uphold a defendant-fiduciary’s decision. The standard of review not only impacts a court’s analysis at trial, ”
In this issue
Regulatory Action and Guidance (2) · Retirement Plans (6) · Litigation (5) · General Benefits (4) · Press Releases (1)
Regulatory Action and Guidance
2 items“On July 20, 2026, the Pension Benefit Guaranty Corporation (PBGC) issued a proposed rule that updates its policies for calculating, imposing, and waiving financial penalties when a single-employer or multiemployer defined benefit (DB) plan does not provide certain required notices or other important information timely as mandated by law or regulation.” MORE >>
Source: Milliman
“The IRS has issued a private letter ruling on I.R.C. §4980 confirming a qualified defined contribution plan qualifies as a replacement plan for receiving surplus assets from a terminated defined benefit pension plan, with direct transfers of at least 25 percent of surplus assets excluded from employer gross income, exempt from excise tax, and allocated through a suspense account over a seven year period satisfying statutory allocation requirements. [PLR 202631008]” MORE >>
Source: news.bloombergtax.com
Retirement Plans
6 items“WTW 2026 Defined Contribution Survey report finds employers are asking defined contribution plans to do more than they were originally designed for, prompting greater focus on retirement income, AI, governance, and measurable participant outcomes There is a gap between what employers expect their 401(k) to achieve and what it was actually designed to do, and it’s leading to mounting pressure to prove plans work, according to the WTW 2026 Defined Contribution Survey report, released today. U.S. employers are facing a clear retirement readiness challenge: they value defined contribution (DC) plans, but many still lack a precise view of whether those plans are helping employees retire on time a” MORE >>
Source: 401(k) Specialist
“Benefit consulting firm October Three estimates that cash-balance hybrid DB plans comprise about 65% of all U.S. DB plans, with traditional DB plans accounting for the remaining 35%. Jonathan Price, vice president and national retirement practice leader at employee benefits and human resources consulting firm Segal, credited the United Auto Workers for placing a stake in the ground to elevate the importance of retirement security in labor negotiations.” MORE >>
Source: Employee Benefit News
[Litigation]
401(k)s Help Workers Save. Can They Also Help Them Spend in Retirement?“As ‘Peak 65’ continues and a record number of Americans enter retirement, plan sponsors are discovering that keeping retirees’ money in-plan is easier said than done.” MORE >>
Source: PLANSPONSOR
[General Benefits]
Employment Law Update: Profit Sharing Termination“Thinking about pulling the plug on your company’s profit-sharing plan? You’re not alone—it’s one of the most common questions we receive. The good news: it’s entirely doable. The key is understanding that termination isn’t a single event but a process that requires formal employer action and a complete plan wind-up....” MORE >>
Source: JD Supra
“Initial expectations, said Cerulli Associates Director Chris Bailey, were that start-ups and “micro” plans would adopt PEPs rapidly, in order to save money and also save time. And those expectations were met, he indicated. Spectacularly, according to Cerulli, which reported that 99% of the PEPs that have been adopted involve micro plans. Bailey made his observations in the July 28 Cerulli webinar “The State of Pooled Employer Plans (PEPs): Why Adoption Is Accelerating Across Plan Sizes.” And while adoption of PEPs is still mainly a phenomenon among small and micro plans, Bailey said, there is “movement upmarket.” MORE >>
Source: American Retirement Association
[General Benefits]
Will Raising Retirement Plan Limits Really Help Rank-And-File Employees?“by Christopher Carosa, CTFA | Aug 4, 2026 | Basic Members, Commentary | 0 comments Viewing this content requires a Basic (Free) Membership or better. You are not currently logged in.” MORE >>
Source: Fiduciary News
Litigation
5 items“Recently, the Courts of Appeal for the Third and Seventh Circuits held that courts must also apply the abuse of discretion standard of review to class action claims brought under ERISA Section 502(a)(2) that challenge investment decisions made by discretionary fiduciaries for 401(k) plans and employee stock ownership plans. See In re Quest Diagnostics ERISA Litig., 179 F.4th 217 (3d Cir. 2026); see also Rush v. GreatBanc Tr. Co., — F.4th —, 2026 WL 2071139 (7th Cir. 2026). The standard of review matters. All else equal, the more deferential the standard, the more likely a court will uphold a defendant-fiduciary’s decision. The standard of review not only impacts a court’s analysis at trial, ” MORE >>
Source: Groom Law Group
“After more than six years of litigation, adversarial discovery, and extensive arm’slength negotiations between experienced counsel, on June 16, 2026, the partiesagreed in principle to settle the case.” This suit was initially filed in May 2020 in the U.S. District Court of the District of New Jersey against the fiduciaries of the $4.4 billion ADP TotalSource Retirement Savings Plan (including third-party investment consultant NFP Retirement Inc.[i]) on behalf of participants in the MEP by the then-named law firm of Schlichter Bogard & Denton (now just Schlichter Bogard LLC). The settlement brings to mind another involving a multiple employer plan (MEP) from back in April 2025 when Schlichter” MORE >>
Source: American Retirement Association
“By filing 'amicus briefs' on behalf of the corporate plan sponsors—the defendants—in several participant-led, ERISA-based class action suits, the Trump DOL signals its alignment with the corporations.” MORE >>
Source: retirementincomejournal.com
“Yet another federal judge has dismissed a suit by plaintiffs backed by Schlichter Bogard LLC alleging that because of a transfer of obligations to a PE-backed insurance company, their pensions were put at risk.” MORE >>
Source: American Retirement Association
[Retirement Plans]
ADP Settles for $48M in Retirement Plan Fee Lawsuit“Schlichter Bogard LLC, representing the plaintiffs, came to an agreement to end a case originally filed in 2020.” MORE >>
Source: PLANSPONSOR
General Benefits
4 items“First the outstanding analysis recently published by the NYU Stern Center for Business and Human Rights, https://bhr.stern.nyu.edu/quick-take/part-1-the-labor-departments-proposed-401k-rule-protects-private-equity-not-retirees/ review at https://commonsense401kproject.com/2026/08/02/nyu-stern-gets-it-right-the-dols-new-401k-rule-protects-private-equity-not-retirees/ Next, BYU Law Professor William Clayton and Duke Law Professor Elisabeth de Fontenay have submitted what may be the most comprehensive academic comment letter yet opposing the Department of Labor’s proposed 401(k) private-equity rule.” MORE >>
Source: The Commonsense 401(k) Project
“By: BlackRock Client Solutions Group As public pension plans navigate an increasingly complex investment landscape, many are expanding their focus beyond traditional asset allocation toward a deeper understanding of portfolio risk, resilience, and efficiency.” MORE >>
Source: NCPERS
[Regulatory Action and Guidance]
Daily Update — Aug. 3: IRS Rules Estate Can Divide IRAs Into Inherited IRAs Without Tax“Compiled by Wealth Strategies Journal editorial staff. This digest is for informational purposes only and does not constitute legal, tax, or financial advice. Readers should consult their own professional advisors regarding specific matters.” MORE >>
Source: wealthstrategiesjournal.com
“Individual retirement accounts (IRAs) would be removed from the Department of Labor’s (DOL) regulatory authority if new legislation is enacted. The bill would leave the DOL’s prohibited transaction rules in place only for employer-sponsored retirement plans. The bill would continue to prohibit self-dealing in IRAs through the Internal Revenue Code. The Simplifying Modern Access to Retirement Tools for Savings (SMART Savings) Act was introduced in the Senate on July 30 by Sen. John Barrasso (R-Wyo.), and in the House by Rep. Claudia Tenney (R-N.Y.).” MORE >>
Source: American Retirement Association
Press Releases
1 item“The American Society of Pension Professionals and Actuaries (ASPPA) launched Ask ERISA™️ — its innovative and engaging research tool for advisors, plan consultants, and home office teams — on July 30.” MORE >>
Source: Gibson Dunn
Also of Note
- The Standard Launches 403(b) PEP for Nonprofit Organizations — “The Standard Insurance Company on July 30 announced the expansion of its pooled employer plan (PEP) capabilities with the introduction of an ERISA 403(b) PEP for nonprofit organizations.” (American Retirement Association)
- MissionSquare Launches New In-Plan Retirement Income Solution — “MissionSquare recently announced the activation of Income America 5forLife, its retirement income solution designed to help plan participants convert a portion of their retirement savings into guaranteed lifetime income.” (American Retirement Association)