Verizon Targeted in Latest 401(k) Plan Forfeiture Challenge

Verizon Communications Inc. mismanaged its employees’ 401(k) plan by using the unvested contributions forfeited by departing workers for its own benefit, a federal lawsuit alleges.

The telecommunications company is accused of “reflexively” putting 401(k) forfeitures toward the money it’s required to contribute to the plan, instead of using these amounts to help cover the administrative expenses charged to workers. Verizon saved more than $125 million between 2019 and 2023 by using forfeitures in this way, two plan participants said in a proposed class complaint filed Tuesday in the US District Court for the Southern District of New York.

“While Defendants’ ...