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Federal judge tosses ERISA lawsuit over UWM 401(k) forfeiture use
The court said UWM’s 401(k) plan terms permitted forfeitures to offset required employer contributions when not used for plan expenses.
A federal judge in Michigan dismissed a proposed class action accusing United Wholesale Mortgage (UWM) of misusing 401(k) forfeitures to reduce required employer contributions. HousingWire reports the court held the practice was allowed by the plan’s terms and by federal retirement law.
U.S. District Judge Susan K. DeClercq of the Eastern District of Michigan granted UWM’s motion to dismiss on Sept. 23, citing limitations on the plaintiffs’ ERISA claims based on Sixth Circuit precedent, according to the report.
The lawsuit, filed in April 2025 by former UWM employees Kristopher Lapko, Alan Tucsok and Becky Forbush on behalf of other participants, alleged UWM and its 401(k) committee violated ERISA by using forfeited funds “improperly” instead of paying plan expenses. The story says the plan language allows the forfeiture use described in the case, depending on whether the forfeitures are needed for plan expenses.