ERISA (the Employee Retirement Income Security Act of 1974) is a U.S. federal law that sets minimum standards for most private‑sector retirement plans, including 401(k)s. It does not require an employer to offer a plan, but if they do, ERISA: (1) sets rules for when workers can join, vest, and earn benefits; (2) requires plan fiduciaries to manage the plan prudently and solely in participants’ interests; (3) requires plans to give participants key information (like a summary plan description and benefit statements); and (4) lets participants sue for benefits or for breaches of fiduciary duty. For defined‑benefit pensions it also provides PBGC insurance, but for 401(k)s the main protections are fiduciary standards, disclosure, and enforcement rights.
Under ERISA, someone is a plan “fiduciary” if they exercise discretion or control over a retirement plan or its assets, or give investment advice for a fee—so an owner who runs a company 401(k) plan is usually a fiduciary for that plan. Fiduciaries must act solely in the interest of plan participants and beneficiaries, act prudently, follow plan documents, diversify investments, and pay only reasonable plan expenses. A “fiduciary breach” occurs when those duties are violated—for example, by failing to remit employee 401(k) contributions promptly to the plan, misusing plan assets, or otherwise failing to prudently manage the plan. In this case, the DOL alleged that Hahn and Infrastructure & Development Engineering Inc. withheld employee 401(k) contributions and failed to prudently manage the plan, which the court treated as ERISA fiduciary breaches.
The consent order requires Hahn and the company to pay $45,699.63 “to the accounts of affected employees and former employees,” meaning the money must be allocated back into each person’s 401(k) account rather than kept in the company’s hands. EBSA’s correction rules generally require fiduciaries to calculate, for each participant, the missing contributions plus lost earnings and then deposit those amounts to their accounts, with documentation submitted to DOL. The order and public documents do not spell out the exact allocation formula or any required steps for participants, but in cases like this the restoration is usually carried out by the plan fiduciary; participants typically do not have to take action to have the money restored, though they may later need to choose how to receive their account when the plan is terminated and assets are distributed.
Terminating a 401(k) plan means the employer formally ends the plan: no new contributions are made, and the plan must distribute all assets as soon as administratively feasible. When a qualified retirement plan terminates, all participants (current and former employees) must become 100% vested in their accrued benefits, and their account balances must be paid out—typically as a rollover to an IRA or another employer’s plan, or as a cash distribution if the participant chooses. In this case, the court order requires Hahn to terminate the company’s 401(k) plan and be removed as a fiduciary, so after the restoration of assets, participants should receive instructions on how to receive or roll over their final account balances; after distribution, the plan ceases to exist and no further benefits accrue.
EBSA’s Voluntary Fiduciary Correction Program (VFCP) is a self‑correction program that lets plan sponsors and other responsible parties fix certain ERISA fiduciary violations (such as delinquent participant contributions, improper loans, or prohibited transactions) by fully correcting the problem, restoring losses and lost earnings to participants, and then submitting an application to DOL. If DOL accepts the correction as complete, it issues a “no‑action” letter stating it will not pursue civil enforcement or certain excise-tax penalties for the corrected transaction. The Delinquent Filer Voluntary Compliance Program (DFVCP) is a separate program that lets plan administrators who failed to file required annual reports (Form 5500 and related filings) come into compliance by filing the missing reports and paying reduced civil penalties that are capped per filing and per plan; in exchange, DOL generally does not assess the much higher maximum penalties otherwise available for late or non‑filing.
The DOL’s Employee Benefits Security Administration (EBSA) enforces ERISA mainly through civil investigations of plans, fiduciaries, and service providers that are opened based on participant complaints, data analysis of Form 5500 filings, referrals from other agencies, and other leads. Investigators review documents, interview witnesses, and, when they find violations, seek voluntary correction (including restoring plan losses and lost earnings) and assess civil penalties; if issues are not corrected, EBSA refers cases to the Solicitor of Labor to file lawsuits seeking court orders like the one against Infrastructure & Development Engineering Inc. and Hahn, and it can also refer potential crimes to federal prosecutors. EBSA’s 2023 enforcement results show over $1.4 billion recovered for plans, participants, and beneficiaries in a single year, with hundreds of millions from investigative enforcement actions and additional recoveries from informal complaint resolution and correction programs—indicating that cases involving ERISA violations, including delinquent 401(k) contributions, are investigated and corrected frequently, even though DOL does not publish a specific count just for this exact fact pattern.
Under ERISA, affected employees and former employees retain the right to sue fiduciaries for breaches of duty if they believe the plan has not been fully made whole—for example, if not all missing contributions or lost investment earnings were restored—and courts can order fiduciaries to restore plan losses, including appropriate interest, and to disgorge any profits made from misuse of plan assets. The civil penalty in this case (about $9,139.93) is a regulatory penalty payable to the government, not to participants, so it does not compensate them directly. ERISA remedies are generally limited to making the plan or participant whole (benefits due, lost earnings, and equitable relief) and do not typically allow separate punitive or extra‑compensatory damages, though courts may award attorneys’ fees in some successful participant suits. Public documents on this particular case do not indicate any separate participant lawsuits, so whether additional remedies are available in practice would depend on the specific facts and any future litigation.