The TE Connectivity 401(k) lawsuit pairs an excessive-fee claim with a forfeiture-use claim. Forfeiture claims require proof that fiduciaries with real discretion put the employer's interest first instead of paying costs borne by participants. Forfeitures are unvested employer contributions left behind by workers who leave before vesting. According to Bloomberg Law, participant Arturo Silva filed Silva v.
TE Connectivity Corp. on Oct. 30, 2026 Bloomberg Law report. The complaint alleges excessive 401(k) recordkeeping fees and misuse of forfeited funds for the company's benefit.
Official resources:
- Verify the IRS permitted uses of 401(k) plan forfeitures — Readers can verify Treasury recognizes paying expenses, reducing employer contributions, or increasing participant accounts as permitted forfeiture uses.
- Evaluate your retirement plan fees with the Labor Department guide — Readers can compare their own recordkeeping and administrative fees against the agency's fee-evaluation guidance.
Table of Contents
- What the TE Connectivity complaint alleges
- Where 401(k) forfeitures come from
- What plaintiffs must plead to survive
- Why courts often reject these claims
What the TE Connectivity complaint alleges
Bloomberg Law reporting on the complaint states that roughly 15,000 participants paid about $71 per person each year for recordkeeping. It compares that figure with $27 at comparable plans. It also alleges more than $11 million in forfeitures was used to benefit the employer.
The filing is a proposed class action, not a settlement. Participants do not need to file anything based on this filing alone. Workers who were in the plan during the period at issue should keep account statements and watch for court action on any later settlement.
Where 401(k) forfeitures come from
Forfeitures are unvested matching or other employer contributions left behind when workers separate before completing required vesting service. Gibson Dunn explains that plan terms typically direct them to pay expenses, offset employer contributions, or boost participant accounts Gibson Dunn review of forfeiture litigation.
A worker who leaves after two years of a four-year vesting schedule may leave part of the match unvested. The plan then holds that money and applies it under the written forfeiture rule. The dispute is which allowed use the fiduciaries chose.
What plaintiffs must plead to survive
Forfeiture plaintiffs must plead that fiduciaries exercising discretion breached ERISA loyalty and prudence. Analyses from Gibson Dunn and Nixon Peabody frame the test as prioritizing contribution offsets over paying participant-borne expenses Nixon Peabody alert on forfeitures. They must tie that choice to breach of loyalty, breach of prudence, anti-inurement violation, or prohibited transaction.
Courts require proof tied to plan language. NAPA and Winston and Strawn reporting notes that judges look for deprivation of a promised benefit or failure to follow plan documents. Judges reject claims that discretionary may-pay-expenses language compels the expense-paying choice.
- Loyalty and prudence: discretion used for employer savings, not participant costs.
- Anti-inurement: plan assets allegedly kept for employer benefit.
- Prohibited transaction: offset choice allegedly favors an interested party.
Why courts often reject these claims
The U.S. Department of Labor has filed amicus briefs in four appeals on this issue. Gibson Dunn's second-quarter 2026 ERISA update summarizes the position Gibson Dunn quarterly ERISA update. Where a plan permits either use, choosing offsets without more does not breach fiduciary duty. Gibson Dunn counted dismissal in 24 of 28 recent forfeiture cases.
Winston separately counts 80-plus similar suits largely rejected as overbroad categorical theories. The pattern favors defendants unless plaintiffs show a plan-specific promise or disloyal exercise of discretion. Sponsors reduce risk by expressly permitting both forfeiture uses in plan documents. Legal 500 and Buchanan guidance describes treating allocation as a settlor design choice and documenting Treasury-recognized practice rather than leaving unfettered fiduciary discretion. Participants should read the summary plan description and fee disclosures and save them before any deadline is announced.