Business Groups Back AT&T in 401(k) Forfeiture Appeal
The ERISA Industry Committee argues that companies can use plan forfeitures to offset future matching contributions.
Updated on Sept. 28, 2026 in Retirement Planning
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The ERISA Industry Committee, the U.S. Chamber of Commerce, and the American Benefits Council have filed an amicus brief supporting AT&T. This filing urges the U.S. 9th Circuit Court of Appeals to uphold the dismissal of a lawsuit challenging how the firm handles retirement plan forfeitures.
Why it matters
The legal dispute centers on whether companies can legally use forfeited employer contributions to reduce their future matching obligations. This outcome could influence how employers manage retirement plan costs and affect long-term benefits for millions of workers participating in similar savings plans.
The AT&T Retirement Savings Plan held $43.1 billion in assets for 203,226 participants as of the end of 2024. Industry groups filed the brief following a sharp rise in legal challenges, with 48 complaints filed in 2025 compared to 29 in 2024.
The players
AT&T
A major corporation that operates a multi-billion dollar retirement savings plan for its employees.
The ERISA Industry Committee
An advocacy group representing large employers on matters of benefits and federal retirement law.
Otis Wright II
A U.S. District Judge who presided over the initial dismissal of the forfeiture lawsuit.
The details
The lawsuit, Luis Hernandez v. AT&T Services Inc. et al., originally sought to challenge the company's practice of using forfeited funds to lower its own future retirement contributions. In August 2026, U.S. District Judge Otis Wright II dismissed the complaint in the Central District of California. Industry groups now argue that AT&T followed the terms written into its retirement plan, contending that federal law permits using these forfeitures as a cost-offsetting measure.
Timeline
2024: The AT&T Retirement Savings Plan reported assets of $43.1 billion.
2025: Plaintiffs filed 48 plan forfeiture complaints against employers.
August 2026: U.S. District Judge Otis Wright II dismissed the initial complaint.
September 2026: The ERISA Industry Committee filed the amicus brief in the appeal.
Money Landscape
This litigation highlights a broader trend of legal scrutiny regarding how large corporations manage retirement plan forfeitures. It follows a significant increase in recent forfeiture-related complaints that challenge established employer contribution practices.
Retirement plan participants should review their plan documents to understand how their employer treats forfeited contributions. Discussing your specific plan provisions with a qualified financial or tax professional can help you evaluate how company policies might impact your total retirement benefit.
The takeaway
The appellate court decision will clarify whether companies can use forfeitures to lower their future matching obligations. For now, workers should monitor their own 401(k) statements to understand the specific rules governing their employer's retirement matching policy.
Further reading
For more on managing your workplace savings, visit our section on Retirement Planning.
Source note: This article includes information reported by PLANADVISER.
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