When it comes to 401(k) litigation, it seems that the flavor of the month is suing large 401(k) plans over their forfeiture provision. Mattel is the latest defendant.
The plaintiff in the Mattel case has accused plan executives of using forfeiture funds in the 401(k) plan to reduce company contributions to the plan rather than to reduce plan expenses.
This is the eighth such lawsuit and it should be interesting if a practice that has always been allowed is enough to trump concerns that reducing employer contributions through forfeitures causes plan participants to pay more in plan expenses.
