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The U.S. Supreme Court, in its Hughes v. Northwestern University ruling, underscored the need for plan sponsors to err on the side of more rather than less when considering the scope of their fiduciary responsibilities. While the case focused on high-cost investment options, it's conceivable that the ruling could eventually expose plan sponsors to fiduciary risk for decisions that produce unnecessarily high levels of cash-out leakage for terminated participants, a potential risk that could be avoided if plan sponsors were to proactively adopt asset portability solutions, such as auto portability.
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