DOL Files Third Amicus Brief in 401(k) Forfeiture Complaint

The Department of Labor filed its third amicus brief supporting employers in plan forfeiture cases. The department’s latest filing on January 23 comes in Jim Cain v. Siemens Corp., a case dismissed by a district court in August 2025 before the plaintiffs appealed to the U.S. 3rd Circuit Court of Appeals.

The DOL previously amicus briefs in two separate forfeiture cases currently under consideration in the U.S. 9th Circuit Court of Appeals.

In its latest brief, as in the previous ones, the DOL argued that while choosing how to allocate forfeitures, based on the plan’s terms, is a fiduciary decision, the decision on how to use those forfeitures is a settlor function—and therefore cannot constitute a fiduciary breach under the Employee Retirement Income Security Act.

Under ERISA, settlor functions involve business decisions about the design, establishment, amendment or termination of a benefit plan, such as deciding what benefits to offer or whether to modify plan terms, while fiduciary functions involve the administration and management of plan assets and benefits in the exclusive interest of plan participants and beneficiaries, such as selecting investments, processing claims or managing plan funds.

Fiduciary functions are held to a higher standard under ERISA, being required to act in the best financial interest of plan participants and beneficiaries.

The DOL also maintained that even if the plaintiff is correct about possible uses for forfeited funds, merely alleging that fiduciaries acted imprudently or disloyally is insufficient to establish a breach.