Schlichter’s Ford Suit Tests New Tactic for 401(k) Forfeitures

Rachel Faye Smith spoke with Bloomberg Law about Schlichter Bogard LLC’s latest ERISA lawsuit against Ford Motor Co. The case illustrates a potential new frontier in retirement plan litigation, as courts have hesitated to embrace the wave of cases centered on the treatment of 401(k) contributions forfeited by departing workers. The May 8 lawsuit accuses Ford of paying its 401(k) service providers with plan assets in violation of written terms requiring the company either to cover those costs itself or to pay them using plan forfeitures.

Rachel noted, “The ERISA standard is clear that you’re required to operate the plan in accordance with its terms, and one of the most important acts a fiduciary can undertake is understanding what the plan says and administering it in accordance with those terms.”

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