United Wholesale Mortgage Sued Over 401(k) Plan Forfeiture Use

United Wholesale Mortgage LLC was hit with a proposed class action by former employees who say the mortgage lender mismanages their retirement plan by using forfeited 401(k) money for its own benefit.

The Michigan-based company used 401(k) forfeitures to reduce the contributions it would otherwise have to make to the plan, instead of using that money to reduce the administrative expenses charged to workers, the employees said in their complaint. This choice saved the company money while reducing workers’ retirement savings in violation of the Employee Retirement Income Security Act, the workers alleged.

“While Defendants’ decisions to use the ...