Business and Retirement Groups Support AT&T in 401(k) Forfeiture Case

September 29, 2026 - 02:18

A coalition of business associations and retirement industry organizations has filed a legal brief supporting AT&T in an ongoing court battle over how the company handles forfeited 401(k) funds. The dispute centers on whether employers may use money left behind by departing workers to offset their own future contributions to the retirement plan.

The groups argue that AT&T's practice of applying forfeited balances to reduce future employer contributions aligns with the Employee Retirement Income Security Act and with long standing guidance from federal regulators. According to the brief, this approach has been accepted for decades and is written into many plan documents across the country.

The case has drawn attention because a ruling against AT&T could affect thousands of employers that rely on the same method. Supporters say changing the rules now would create confusion, invite a wave of lawsuits, and raise costs for companies that sponsor retirement plans.

Workers who leave before becoming fully vested typically forfeit part of their employer matching funds. How those forfeited amounts are used has become a central question in the litigation. The business groups contend that AT&T followed the law and that its actions matched common practice in the retirement plan industry.