Northrop Grumman 401(k) Forfeiture Row Is Latest to Be Dismissed

Northrop Grumman Corp. defeated claims that it mismanaged its employees’ 401(k) plan by improperly using forfeited contributions for its own benefit.

The aerospace and defense company’s 401(k) plan document allows forfeitures to be used for three specific purposes—paying administrative expenses, restoring workers’ accounts, or funding employer contributions—without requiring that they be used in “any particular order,” Judge Anthony J. Trenga said.

Northrop’s decision to put forfeitures toward its mandatory plan contributions was therefore valid, Trenga said, dismissing claims that the company breached its fiduciary duties and violated multiple provisions of the Employee Retirement Income Security Act.

ERISA doesn’t obligate employers ...