Contributing Author: Kristine Custodio Suero, Advanced Certified Paralegal

As we move through 2025, the Employee Retirement Income Security Act of 1974 (ERISA) remains a cornerstone of employee benefits law. For plan sponsors, keeping up with ongoing changes in regulatory guidance, enforcement trends and litigation risks is critical. Here's a practical overview of what plan sponsors need to know this year to stay compliant and protect plan assets and participant rights.

What is ERISA and Why It Matters in 2025

ERISA is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry. Its goal is to protect plan participants and their beneficiaries by requiring:

• Plan transparency and disclosure
• Fiduciary accountability
• Procedural safeguards for claims and appeals
• Enforcement mechanisms for participants

Key ERISA Considerations for Plan Sponsors in 2025

• Fiduciary Duties Are in the Spotlight
  • Fiduciaries must act prudently and solely in the interest of plan participants and beneficiaries.
  • DOL enforcement continues to scrutinize excessive fees, ESG-related investment decisions and conflicts of interest in plan administration.
  • Regular benchmarking of plan fees and services remains essential.
• Cybersecurity is a Fiduciary Issue
  • The DOL issued guidance in 2021, which still applies in 2025, outlining best practices for cybersecurity. Plan sponsors should:
    • Vet service providers' data security protocols
    • Implement strong access controls
    • Maintain an incident response plan
• SECURE Act 2.0 Implementation Deadlines
  • Many provisions of SECURE 2.0, passed in late 2022, are effective in 2024 and 2025. Key items for plan sponsors include:
    • Required Roth treatment of employer catch-up contributions for high earners (postponed to 2026 per IRS Notice 2023-62)
    • Mandatory automatic enrollment for new 401(k)/403(b) plans starting in 2025 (Section 101, Pub. L. 117-328)
    • Expansion of long-term part-time employee eligibility (Section 125)
• QDRO Compliance Still Requires Vigilance
  • Plan sponsors and administrators must ensure proper qualification and processing of Qualified Domestic Relations Orders (QDROs).
  • Failure to recognize or improperly implement a QDRO can expose the plan to litigation and penalties.
• Health Plan Transparency and Mental Health Parity
  • ERISA-governed group health plans must comply with increased transparency requirements under the No Surprises Act and Consolidated Appropriations Act.
  • Annual comparative analysis of non-quantitative treatment limits (NQTLs) under the Mental Health Parity and Addiction Equity Act (MHPAEA) is being strictly enforced.
• ERISA Litigation Trends
  • Increased litigation in 2023–2024 over plan fees and investment choices has resulted in several high-profile settlements and court decisions.
  • Courts continue to hold plan sponsors accountable for:
    • Failing to monitor third-party administrators
    • Not conducting regular fiduciary reviews
    • Lacking proper documentation for decision-making processes

Best Practices for Plan Sponsors in 2025

• Conduct fiduciary training annually for all plan committee members.
• Review service provider contracts for reasonableness and fiduciary compliance.
• Audit cybersecurity protocols and participant data access policies.
• Monitor legislative updates and DOL/IRS guidance regularly.
• Maintain thorough documentation of all plan-related decisions and vendor evaluations.

Stay Compliant and Proactive

ERISA compliance is not just about avoiding penalties—it's about safeguarding the retirement and health benefits your employees rely on. Staying informed in 2025 means understanding both the legal obligations and the practical risks that come with plan sponsorship.

If you have questions about your fiduciary responsibilities or need a compliance audit, our attorneys at Schechter Benefits Law Group LLP are here to help. We are trusted advisors in ERISA compliance.

*Nothing stated herein is to be construed as legal or tax advice and shall not form any attorney-client relationship. Each individual situation is unique. Please contact us and speak with one of our attorneys regarding your individual situation.