JPMorgan Backed by DOL in 401(k) Forfeiture Suit

The Department of Labor reinforced its support for employers involved in lawsuits over the use of 401(k) forfeiture funds, filing an amicus brief in the U.S. Ninth Circuit Court of Appeals on Thursday in favor of JPMorgan Chase & Co.

In the brief, the DOL argued that the plaintiff’s claims of fiduciary breach do not hold up under the plan’s documents. The DOL pointed out that the plan “expressly permits the fiduciary to use forfeited contributions to offset employer contributions or to pay the employer’s share of administrative expenses.”

The brief further emphasized that “the plain terms of the plan do not give the fiduciary the discretion to use forfeitures to pay administrative expenses otherwise paid by the plan or to otherwise make allocations to participants’ accounts.” In other words, how the plan is designed—including how forfeitures are used—was a decision made by the plan’s creators, not a matter of fiduciary duty under ERISA law.

The DOL further maintained, as it did in July in its prior amicus brief concerning forfeiture cases, that even if the plaintiff were correct about possible uses for forfeited funds, simply alleging that the fiduciaries acted imprudently or disloyally is not enough. The brief stated that such “bare allegations… are not sufficient to state a plausible claim for breach of ERISA’s fiduciary duties of loyalty and prudence.”

The case is Wright v. JPMorgan Chase & Co., et al. U.S. District Judge Josephine Staton in U.S. District Court for the Central District of California, dismissed the complaint with prejudice in June 2025, ruling that J.P. Morgan fiduciaries properly followed the plan’s procedures. Plaintiffs later appealed.