Judge dismisses UWM 401(k) forfeiture lawsuit under ERISA

A federal judge has dismissed a lawsuit accusing United Wholesale Mortgage (UWM) of improperly using forfeited 401(k) contributions to reduce the company’s required contributions to its employee retirement plan. U.S. District Judge Susan K. DeClercq of the Eastern District of Michigan granted UWM’s motion to dismiss the case on Sept. 23, finding that the company’s use of the forfeitures was permitted under the plan’s terms and federal retirement law. Bloomberg Law first reported the news. The lawsuit was originally filed in April 2025 by former UWM employees Kristopher Lapko, Alan Tucsok and Becky Forbush on behalf of themselves and other participants in UWM’s 401(k) plan. They alleged that UWM and its 401(k) committee violated the Employee Retirement Income Security Act (ERISA) by “improperly” using forfeited funds to reduce the company’s contributions instead of paying plan expenses. Under the plan, employees who leave UWM before fully vesting forfeit the unvested portion of the company’s contributions. The plan says the committee may use forfeitures to “pay administrative expenses.” Any forfeitures not used for that purpose are to be applied to reduce UWM’s contributions. The pl...