By Samantha J. Prince

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Introduction

Domestic violence is sadly and shockingly all too prevalent in the United States.^[1] According to the U.S. Centers for Disease Control, more than one in four women and one in seven men in this country are subject to domestic abuse^[2] “affecting an estimated 10 million people every year.”^[3]

Finances and financial abuse play a significant role in 99% of domestic abuse cases.^[4] “[L]acking financial knowledge or resources is the number one indicator of whether a domestic violence victim will stay, leave, or return to an abusive relationship.”^[5] When abusers have control over financial assets, victims are monetarily paralyzed and have little ability to escape their situation.^[6] Additionally, abusers can engage in financial sabotage by maliciously and intentionally ruining the victim’s credit scores, taking their earnings, or “harassing them at their workplace until they lose their job and their own source of income.”^[7]

Some circumstances can make escaping one’s abuser even more financially challenging. When children are involved, escape is more critical and even more financially difficult for a victim. Further, during high inflationary or economically volatile periods when expenses are higher and investment balances uncertain, it can be more financially challenging to break and stay free from one’s abuser.^[8] Such immediate financial constraints may influence the victim’s choice to stay in abusive situations, since victims may additionally consider the long-term economic impact that leaving these relationships may have.^[9]

Financially empowering domestic abuse victims so they can both escape their abusers and be positioned to remain free is crucial.^[10] First, this essay focuses on the statutory requirements of the newly permissible 401(k) domestic abuse victim distributions. It then proffers how employers can help employees who are in abusive situations through employee benefits like their 401(k) plans.^[11] Specifically, it addresses how employers can shift to a more compassionate position by supporting and assisting their victim employees through their retirement plans.^[12]

I. Creation via SECURE 2.0

The purpose of allowing tax qualification for 401(k) plans is to help employees accumulate wealth for retirement.^[13] The Internal Revenue Code (IRC) provisions applying to 401(k) plans generally discourage pre-retirement withdrawals in favor of the policy that such tax-deferred savings be used for retirement purposes.^[14] In furtherance of this policy, the IRC disincentivizes pre-retirement use of 401(k) plan funds, known as leakage, by imposing a 10% early withdrawal penalty when withdrawn, subject to few exceptions.^[15]

Section 314 of the SECURE 2.0 Act, signed into law on December 29, 2022, by President Joseph Biden and codified as IRC Section 72(t)(2)(K) effective January 1, 2024, takes progressive steps toward providing victims of domestic abuse quick access to resources to aid in their escape from abusive situations.^[16] This section moves to financially empower victims in two key ways, first by allowing 401(k) plans to offer such distributions, and second by exempting them from the 10% early withdrawal penalty.^[17]

First, IRC Section 72(t)(2)(K) allows 401(k) plans to permit domestic abuse victim distributions, defined as any “distribution from an applicable eligible retirement plan” that “is made to an individual during the 1-year period beginning on any date on which the individual is a victim of domestic abuse by a spouse or domestic partner.”^[18] The term “domestic abuse” is defined as, “physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.”^[19]

Domestic abuse victims who participate in 401(k) plans that allow such distributions are permitted to withdraw the lesser of $10,000 or 50% of their vested account balance in the plan.^[20] To illustrate, Victim A who has accumulated $50,000 or more in their 401(k) vested balance may withdraw $10,000, while Victim B with only a vested balance of $5,000 may pull only $2,500.^[21] While these thresholds are somewhat low, they can make a significant impact for someone who needs quick cash to escape their abuser. Still, the more money one has access to, the better their chances are of being able to escape and live independent of their abuser.^[22]

Next, Section 72(t)(2)(K) creates an exception to the 10% early withdrawal penalty.^[23] Eliminating the penalty allows individuals who utilize the domestic abuse victim distribution to net more money to aid in their escape. Sheltering these funds from the 10% penalty would mean more money in the pockets of the victims mentioned in the above example—an additional $1,000 for Victim A and $250 for Victim B. So even though this withdrawal would be immediately includible in gross income, it is not subject to the additional 10% penalty.

Congress’s intent was to ensure that victims have rapid access to life-saving funds.^[24] This essay discusses myriad ways the goal to help such victims can be proliferated through domestic abuse victim distributions.

II. Steps for Employers

There are several ways that employers can use their 401(k) plans to support and assist those in need of domestic abuse victim distributions. While not an exhaustive list, the steps discussed below—particularly when used in conjunction—can promote financial empowerment for victims of domestic abuse.

A.  Amending the 401(k) Plan

Employers can take immediate steps to promote financial empowerment by amending their 401(k) plans. Such amendments would include each or ideally all of the following: permitting domestic abuse victim distributions, eliminating the plan’s vesting schedule if it has one, and changing the contribution structure.

1. Permitting Domestic Abuse Victim Distributions

The first and most obvious step that employers can take to support employees who are domestic abuse victims is to amend their 401(k) plans to permit such distributions.^[25] An individual who has suffered domestic abuse in the prior twelve months qualifies to take the distribution.^[26] This is self-certifying, meaning that the individual does not need to prove they meet the definition to anyone.^[27] Generally, employers need not worry that a plan be disqualified if a distribution is erroneously classified as a domestic abuse victim distribution.^[28] Such reassurance is important so employers are not tempted to seek personal and private information from individuals who request the distribution.

Along with the general allowance, the plan must provide those who take such distributions with the ability to repay the withdrawn amount over a three-year period.^[29] There is no repayment requirement, which minimizes future stress and supports a victim’s ability to remain financially independent.

Employers who decide to amend their plan to permit domestic abuse victim distributions should ascertain whether their plan requires spousal consent for distributions.^[30] If required, the employer must eliminate the spousal consent requirements for plan eligibility to permit domestic abuse victim distributions.^[31]

Even if an employer declines to amend its plan to allow for these distributions, it should advise its employees of the potential to take a distribution that could still qualify for tax purposes. If an employee certifies that a withdrawal meets the domestic abuse victim distribution requirements, they can treat the distribution as such on their personal tax return, thereby liberating the distribution from the 10% penalty.^[32]

2. Eliminating the Plan’s Vesting Schedule

While employee contributions are always 100% vested, a majority of 401(k) plans still apply vesting schedules to their employer contributions.^[33] Employer contribution vesting schedules are permissible if they are at least as generous as a three-year cliff schedule—which requires three consecutive years of service to become 100% vested—or a six-year graded schedule which vests in 20% increments starting once a participant completes two consecutive years of service.^[34] While many plans provide for immediate vesting of employer contributions, three-year cliff is the most prevalently used vesting schedule among the largest plans that do use a schedule—those with more than 5,000 participants.^[35]

Vesting schedules have a negative impact on employees;^[36] and ridding 401(k) plans of them can promote retirement wealth accumulation and make amounts available for emergency purposes.^[37] Specific to this essay’s context, vesting schedules stall or minimize the availability of money that an individual can take as a domestic abuse victim distribution. This is because the statutory threshold is appropriately based on one’s vested account balance. Recall that an individual is permitted to withdraw the lesser of $10,000 or 50% of their vested account balance in the plan. If a plan uses a three-year cliff vesting schedule for its employer contributions, then until the employee has completed three years of service, one is 0% vested and therefore they are unable to withdraw any of the employer contributions to the plan. They are limited to the amount that was 100% vested, which equates to their own contributions. A graded schedule also hurts the individual who needs funds. For example, after someone completes three years of service in a plan that is subject to a six-year graded schedule, they are only vested 40% in employer contributions.

Therefore, vesting schedules could impede a victim’s ability to access funds necessary to leave their abuser by stifling their vested balance. Although the notion that vesting schedules promote employee retention has been called into question, fulfilling a schedule due to grave need may entice a victim into staying with an employer when they should be leaving the geographic area to escape to a safer location.^[38] In situations where abusers are harassing their victims at work, vesting schedules may also dissuade victims from changing jobs to work for an employer that their abuser is unaware of. Further, if an abuser is sabotaging the victim’s work life and causes them to lose their job, the victim may be forfeiting potential funds they need.

Employers who are supportive of people who may need pre-retirement distributions for emergencies, such as domestic abuse victim distributions, should consider eliminating their plan vesting schedules.^[39] This elimination comes at an economic cost to employers, however. When employees leave their employer—voluntarily or involuntarily—with unvested funds in the 401(k) plan, those funds are forfeited and can be used by the plan in other ways, such as to offset future employer contributions or to pay plan administrative fees.^[40] While this may mean a financial sacrifice for the employer because they no longer have forfeitures at their disposal to offset future employer contributions or plan administration fees, the sacrifice is well worth it. Notably, a large number of employers offer immediate vesting without abdicating profitability.^[41]

Though there may be a sacrifice for the employer financially, the value of eliminating vesting schedules in this context can provide some benefits to employers. The administrative costs of “tracking employee tenure and implementing a schedule” can be avoided.^[42] Additionally, the elimination of vesting schedules “could reduce compliance costs by making it easier to obtain safe harbor from annual nondiscrimination testing.”^[43]

Additionally, employees and jobseekers regard certain benefits, such as retirement benefits, as significant portions of their compensation.^[44] “Millennials are . . . willing to leave a job for another simply because it offers a better 401(k) plan.”^[45] Plans that offer better pre-retirement distribution options and better vesting schedules are likely to be considered more favorably than those that do not.^[46] If employers want to keep or attract talent, they should consider eliminating vesting schedules. Certainly, the ability to attract and retain talent is valuable and would help to offset any economic pain resulting from the loss of forfeitures.

3. Changing the Contribution Structure

Employer contributions are often made as “matching” contributions.^[47] Such contributions are made contingent upon, and as a percentage of, the contributions the employee makes. Unfortunately, not all individuals can afford to make significant contributions. Therefore, their corresponding employer matching contributions are non-existent or low. As such, these individuals have lower account balances.^[48] This can be true particularly of women and lower-paid individuals.^[49] As noted supra, women are more likely to be victims of domestic abuse and so they are of particular interest here.

Historically, women have been paid less than their male counterparts.^[50] Additionally, women often work reduced hours or experience career interruptions to care for family, leading to fewer working years.^[51] The resulting gender wage gap reduces women’s ability to contribute as much to their retirement plans.^[52] When they contribute less, corresponding employer matching contributions are lower, thereby resulting in diminished account balances.^[53] As stated supra, the value of the vested account balance directly correlates with the amount an individual is permitted to withdraw.

Employers should consider changing the amount or type of employer contributions in a way that maximizes impact and promotes the potential use of domestic abuse victim distributions. Increasing the match percentage could help somewhat but would still be ineffective for those employees—lower-wage workers by example—who are unable to save more. A shift from matching contributions to contributions that are not based on the amount an employee contributes is a good step to help women and lower-wage employees increase their account balances and ultimately their retirement savings.^[54]

Employers could also amend their plans to be more inclusive of those who cannot afford to contribute. For example, they could amend their plans to change the contribution benchmark to one that uses a percentage of compensation.^[55] This provides more benefits than a match because it is not contingent upon an employee’s contributions or their ability to save. Alternatively, and potentially an even better option for those in lower pay bands, is a flat rate employer contribution that is a fixed dollar amount despite salary or pay.^[56] Flat rate contributions make it easier for an employer to budget or predict contributions from year to year and can make substantial progress in closing retirement gaps.

Regardless of the types of employer contributions made, timing of those contributions is important for maximizing returns, which thereby increases balances.^[57] In 2014, retirement plan reporter Gregory Crawford observed, “Many companies, including some major U.S. banks that sell investments to retirement plans, now delay their contributions to their employees’ 401(k)s until early the following year, paid in one lump sum rather than through regular payroll checks. Those [practices] depress employees’ compounded returns.”^[58] The timing requirements for employer contributions favor the employer, not the employee. “Contributions made by the employer to match deferrals may be made at the time of the elective deferral contribution or later, but not later than the filing deadline of the employer’s income tax return, including extensions.”^[59] And non-matching contributions “must be made by the filing of the deadline of the employer’s tax return, including extensions.”^[60]

Making these changes will not only help those in need of accessing funds for pre-retirement distributions, such as domestic abuse victim distributions, but will also assist with overall retirement savings and reduce the retirement savings gap.

B. Transparency

Both jobseekers and current employees would benefit from knowing whether a plan provides for domestic abuse victim distributions.^[61] Transparency about distributions, contributions, and other critical plan details can help enhance recruitment and retention efforts.^[62] Such disclosures should be easily accessible on the employer’s website and job postings.^[63] This level of transparency not only discloses details about the employer’s 401(k) plan, but also indicates to potential candidates and current employees that the employer supports domestic abuse victims.^[64]

Many people lack understanding about the complexities of retirement plans. Employers who are transparent about their 401(k) plans are affirmatively educating individuals who may need to access funds for domestic abuse reasons. If the plan does not permit such distributions, advising how someone can still take a distribution that would be treated similarly with regard to the 10% penalty can be impactful to those who may need to take this distribution.

C. Providing Financial and Investment Education

Economic independence is a key factor in freeing oneself from a cycle of abuse and staying away from an abuser.^[65] A barrier to achieving economic independence is often a lack of financial literacy. Statistically, women have been more likely to be financially illiterate and less confident in making financial and investment decisions.^[66] They are also generally more conservative investors.^[67] Because 401(k) plan wealth accumulation and correlatively higher vested account balances are reliant on good investment decisions, financial and investment education that aids women and others with decision-making is an imperative.^[68]      

Financial literacy is particularly crucial during times of economic and market volatility, when savings, retirement account balances, and expenses are unstable and harder to estimate.^[69] Due to President Donald Trump’s policies, individuals are facing increased inflation, loss of healthcare, uncertainty, job losses, and business closures, i.e., tariff policies and deficit-expanding legislation are thrusting individuals into financially compromising positions.^[70] Gaining an understanding of how to address these challenging, complex situations are becoming increasingly important for achieving and maintaining financial security.

Surveys show that employees desire increased investment and other financial advice.^[71] Considering the need generally, as well as the current economic landscape, women and other employees will benefit from employer-provided assistance with financial and investment education. Employers can provide educational programs directly, or recommend finance or investing materials, such as podcasts, to help individuals better understand general strategies of investment.^[72] Additionally, employers could provide access to financial advisors.^[73] Allowing these resources to be accessed while on the clock can also provide greater support for employees and encourage more employee participation in financial programs that will benefit them.^[74]

While general financial and investment educational resources are widely helpful, domestic abuse victims face unique challenges and as such require programs that factor in such challenges.^[75] Tailoring the program toward victims means conjoining confidence-building self-sufficiency with skills to manage finances and investments, with the ultimate goal of achieving economic independence.^[76] Employer-provided education can equip victims with the resources necessary to navigate the complexities of a tumultuous economy so they can leave their abuser and establish financial security.^[77]

Conclusion

Because victims of domestic abuse are often financially tied to their abusers, it is often difficult to obtain the money and resources necessary to escape. SECURE 2.0 permits penalty-free pre-retirement distributions from 401(k) plans for domestic abuse victims. But for there to be an impact, there needs to be a concerted effort from employers. Employers should not only amend their 401(k) plans to allow for domestic abuse victim distributions, but do more by eliminating vesting schedules, and changing their contribution structures. Further, they should be more transparent about these features of their 401(k) plan so that employees and jobseekers are reminded or better informed. Lastly, employers can provide financial literacy education to help their employees understand how to navigate taking distributions, investing, and managing their retirement savings. The urgency for employer-provided financial and investment education is heightened due to the ramifications of Trump’s policies. Gaining such financial and investment knowledge will assist victims in becoming financially secure and lessen the possibility of a return to their abuser.

Samantha J. Prince is an Associate Professor of Law at Penn State Dickinson Law. She earned her LLM (Tax) from Georgetown University Law Center; JD Widener Commonwealth Law; and her BS in Chemistry from Muhlenberg College.

[1] Thomas J. Wilson, Money, a powerful weapon in domestic violence, CNN (Sep. 19, 2014), https://www.cnn.com/2014/09/19/opinion/wilson-domestic-violence-financial-abuse/ [https://perma.cc/5B8K-T7Z7] (“The sheer scope of domestic violence overall in this country almost defies belief.”).

[2] Martin R. Huecker, Kevin C. King, Gary A. Jordan & William Smock, Domestic Violence, Nat’l Libr. of Med. (Apr. 9, 2023), https://www.ncbi.nlm.nih.gov/books/NBK499891/#:~:text=According%20to%20the%20CDC%2C%201,sexual%20violence%20during%20their%20lifetimes [https://perma.cc/7RB2-QDDG].

[3] Id.

[4] Adrienne E. Adams, CFS Research Brief 2011-5.6: Measuring the Effects of Domestic Violence on Women’s Financial Well-Being, Ctr. for Fin. Sec. at the Univ. of Wisconsin-Madison (May 17, 2011), https://cfs.wisc.edu/wp-content/uploads/2015/04/adams2011.pdf [https://perma.cc/WR8W-EKHS].

[5] How Money Traps Victims of Domestic Violence, The Atlantic, https://www.theatlantic.com/sponsored/allstate/how-money-traps-victims-of-domestic-violence/750/ [https://perma.cc/JYW5-MCTL] (last visited June 30, 2025); TANF and Domestic Violence: Cash Assistance Matters to Survivors, Ctr. on Budget and Pol’y Priorities (Oct. 26, 2021), https://www.cbpp.org/research/income-security/tanf-and-domestic-violence-cash-assistance-matters-to-survivors [https://perma.cc/KF7R-XA6D].

[6] The Atlantic, supra note 5.

[7] Id.; see Amy Warren, Trudi Marchant, Darcee Schulze & Donna Chung, From Economic Abuse to Economic Empowerment: Piloting a Financial Literacy Curriculum With Women Who Have Experienced Domestic and Family Violence, 34 Affilia 498, 507 (2019).

[8] See generally Dana Harrington Connor, Financial Freedom: Women, Money, and Domestic Abuse, 20 Wm. & Mary J. Women and L. 339, 340 (2014) (“Economic instability is a link that binds a woman to her abuser.”).

[9] Medical treatment, high mental health costs, and job stability are all long-term financial concerns that likely affect a victim’s ability to escape their abuser. 64% of those who identified as victims of domestic violence reported that their ability to work was affected by the violence in their relationships. Empowering Domestic Violence Survivors in the Workplace, Nat’l Domestic Violence Hotline, https://www.thehotline.org/resources/empowering-domestic-violence-survivors-in-the-workplace/#:~:text=Companies%20can%20offer%20employees%20mental,may%20feel%20embarrassed%20by%20it [https://perma.cc/86Y7-HFVR] (last visited Sep. 12, 2025).

[10] See “We Would Have Had to Stay”: Survivors’ Economic Security and Access to Public Benefit Programs, Nat’l Res. Ctr on Domestic Violence (Nov. 2018), https://vawnet.org/sites/default/files/assets/files/2018-11/NRCDV_PublicBenefits-WeWouldHaveHadToStay-Nov2018.pdf [https://perma.cc/FG7C-VKAC] (finding that 67% of survivors returned to an abusive relationship or stayed longer due to financial concerns).

[11] Minimizing reliance on credit scores or ratings when hiring is one way that employers can help domestic abuse victims. See Wilson, supra note 1 (“Companies should make sure employee benefits plans provide a helping hand when needed.”); Id.

[12] This essay focuses on 401(k) plans, but such distributions are permissible from other plans such as 403(b) plans. See 26 U.S.C. § 72(t)(2)(K)(vi)(I).

[13] See generally Samantha J. Prince, Megacompany Employee Churn Meets 401(k) Vesting Schedules: A Sabotage on Workers’ Retirement Wealth, 41 Yale L. & Pol’y Rev. 1 (2022) (discussing how plans with vesting schedules can have harsh impacts on employee retirement savings).

[14] Tax-qualified plans are advantageous to both employees and employers. Employees may contribute on a pre-tax basis and defer tax on accumulated investment gains until money is withdrawn. Employers get a tax deduction for contributions they make. See id. at 12.

[15] 26 U.S.C. § 72(t)(1); Retirement Topics – Exceptions to Tax on Early Distributions, Internal Revenue Serv. (May 27, 2025), https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-exceptions-to-tax-on-early-distributions [https://perma.cc/UJ3J-9N85].

[16] There are other ways domestic abuse victims can access money from their 401(k) plan accounts such as through loans, or other types of withdrawals assuming their plan permits such. 26 U.S.C. § 72(t)(2)(K).

[17] 26 U.S.C. § 72(t)(2)(K).

[18] 26 U.S.C. § 72(t)(2)(K)(iii)(I).

[19] 26 U.S.C. § 72(t)(2)(K)(iii)(II). For more details relative to the covered abuse definition, see Lisa Brugman, Domestic Abuse Victims and Retirement Distributions, TaxAudit (May 19, 2025), https://www.taxaudit.com/tax-audit-blog/2025/domestic-abuse-victims-and-retirement-distributions [https://perma.cc/92J9-SJ69].

[20] 26 U.S.C. § 72(t)(2)(K)(ii).

[21] See I.R.S. Notice 2024-25, 2024-28 I.R.B. 31, 35.

[22] See Connor, supra note 8, at 365.

[23] 26 U.S.C. § 72(t)(2)(K).

[24] Lucy McBath, McBath Introduces Bill to Support Victims of Domestic Abuse (May 4, 2021), https://mcbath.house.gov/2021/5/mcbath-introduces-bill-to-support-victims-of-domestic-abuse [https://perma.cc/V6FP-J4TF].

[25] Including domestic abuse victim distributions in a plan is discretionary. See I.R.S Notice 2024-2, 2024-2 I.R.B. 316, 332; Notice 2024-55, supra note 21, at 33 (“It is optional for an applicable eligible retirement plan to permit domestic abuse victim distributions pursuant to section 72(t)(2)(K).”).

[26] 26 U.S.C. § 72(t)(2)(K)(iii)(I).

[27] 26 U.S.C. § 72(t)(2)(K)(vi)(III).

[28] I.R.S. Notice 2024-25, supra note 21, at 34 (“[I]f a distribution from an applicable eligible retirement plan to a domestic abuse victim would be a domestic abuse victim distribution (without regard to the limitation in section 72(t)(2)(K)(ii)), a plan will not be treated as failing to meet any requirement under the Code merely because the plan treats the distribution as a domestic abuse victim distribution, unless the aggregate amount of the distributions from all plans maintained by the employer (and any member of any controlled group that includes the employer) to the domestic abuse victim exceeds the limitation described in IRC Section 72(t)(2)(K)(ii).”).

[29] If this amount is repaid, taxation is avoided until the money is distributed. Brugman, supra note 19. For information relative to rollovers and domestic abuse victim distributions, see I.R.S. Notice 2024-25, supra note 21, at 34 (Qs B-12 and B-13).

[30] Jenny Kiffmeyer, Case of the Week: Spousal Consent and the New Domestic Abuse Distribution Option, Nat’l Ass’n Plan Advisors (Aug. 21, 2024), https://www.napa-net.org/news/2024/8/case-week-spousal-consent-and-new-domestic-abuse-distribution-option/ [https://perma.cc/BTG3-SRVB].

[31] Id.; see I.R.S. Notice 2024-25, supra note 21, at 35. Eliminating all spousal consent requirements would allow for domestic abuse victim distributions sans consent but it could work against vulnerable individuals whose spouse could be clandestinely withdrawing funds from their 401(k) without such individual’s knowledge. The Women’s Retirement Protection Act of 2025 would require consent for 401(k) withdrawals. See Women’s Retirement Protection Act of 2025, Senator Tammy Baldwin (2025), https://www.baldwin.senate.gov/imo/media/doc/wpra_2025_one_pager.pdf [https://perma.cc/8J2F-QYYP]. Considering these vulnerabilities, the spousal consent rules should not apply to domestic abuse victim distributions.

[32] I.R.S. Form 5329.

[33] Plan Sponsor Council of Am., PSCA’s Annual Survey of Profit Sharing and 401(k) Plans 44 (2024). The PSCA surveyed 709 plans in 2024. 60.3% of plans surveyed use a vesting schedule for matching contributions, and 67.2% use one for non-matching employer contributions.

[34] 26 U.S.C. § 411(a)(2)(B). The three-year cliff schedule provides that contributions are 0% vested until three consecutive years of service have been completed.

[35] Plan Sponsor Council of Am., supra note 33, at 44. Home Depot and Amazon are among the large employers using three-year cliff schedules. Samantha J. Prince, Timothy G. Azizkhan, Cassidy R. Prince & Luke Gorman, The Effects of 401(k) Vesting Schedules—in Numbers, 134 Yale L.J.F. 1, 1 (2024) (“Our findings show that the number of participants terminated before full vesting is growing rapidly.”).

[36] See generally Prince, supra note 13 (discussing how a combination of vesting schedules and high turnover forms a hindrance to employees accumulating retirement savings).

[37] See generally Samantha J. Prince, Vesting Villainy: The Call to Ban 401(k) Vesting Schedules, 27 Univ. of Penn. J. of Bus. L. (forthcoming) (advocating for the elimination of vesting schedules from 401(k) plans).

[38] Paul Mulholland, Non-Immediate Vesting Does Not Help Companies Retain Employees, PLANADVISOR (Mar. 23, 2023), https://www.planadviser.com/non-immediate-vesting-not-help-companies-retain-employ-ees [https://perma.cc/NHN9-4HVL]; see generally Prince, Azizkhan, Prince & Gorman, supra note 35; Guillermo Carranza & Aaron Goodman, Retention or Regressivity? The Empirical Effects of 401(k) Vesting Schedules, Soc. Sci. Rsch. Network (Jan. 16, 2025), papers.ssrn.com/sol3/papers.cfm?abstract_id=4876231 [https://perma.cc/Z66R-FR3B] (casting doubt on the existence of a causal relationship between vesting schedules and employee retention).

[39] Professor Pratt shares the author’s view that vesting schedules should be eliminated. One of his arguments is that eliminating vesting schedules enhances portability. David A. Pratt, Too Big to Fail? The U.S. Retirement System in 2019, 27 Elder L.J. 327, 363 (2020).

[40] See Prince, supra note 13. The number of individuals who forfeit is significant—1,870,947 plan participants in 2022 based on an analysis of 909 401(k) plans. Prince, supra note 37, at 14 fig.1. And per research of 909 401(k) plans in 2022, the amount of forfeitures used was a staggering $1,537,811,554. Prince, supra note 37, at 23 fig.6.

[41] See Prince, supra note 37, at 26-30. This is true across industries and competitor companies. Compare Lowe’s whose plan provides immediate vesting to Home Depot whose plan uses a three-year cliff vesting schedule. Id. Lockheed Martin was previously commended for its 401(k) plan’s immediate vesting of matching contributions (as compared to its competitor Northrup Grumman’s use of a three-year cliff). Id. As of Jan. 1, 2025, Lockheed Martin’s 401(k) plan was amended to switch from its previously used immediate vesting structure to a five-year graded schedule for matching contributions. Lockheed Martin Corp., Annual Report (Form 11-K) 5, (June 24, 2025). Observers have previously lauded the company’s immediate vesting structure (especially when compared to their competitor Northrup Grumman who use a three-year cliff). Unfortunately, a change like Lockheed Martin’s is disappointing as it is the opposite of the change to immediate vesting recommended in this section.

[42] Paul Mulholland, Do 401(k) Vesting Schedules Help with Worker Retention?, Nat’l Ass’n Plan Advisors (Feb. 21, 2025), https://www.napa-net.org/news/2025/2/do-401k-vesting-schedules-help-with-worker-retention/#:~:text=Writer%20and%20Reporter-,In%20what%20may%20come%20as%20a%20surprise%2C%20new%20research%20from,more%20generous%20than%20the%20minimums [https://perma.cc/RZK8-GVCK].

[43] Id.

[44] Samantha J. Prince, Benefits Transparency, 108 Marq. L.R. 37, 53 (2024); State of the Workplace 28, Morgan Stanley at Work (2025), https://www.morganstanley.com/content/dam/msatwork/doc/pdfs/state-of-the-workplace-2021/state-of-the-workplace-study-2025.pdf [https://perma.cc/QX5D-QBEJ].

[45] Amanda Roesser, Do Millennial Employees (Really) Love Your 401k Plan?, 401(k) Specialist (Feb. 14, 2019), https://401kspecialistmag.com/do-millennial-employees-love-your-401kplan/ [https://perma.cc/K2B7-8TLT].

[46] For an example of an employer who found success with employee recruitment once lowering the plan’s vesting schedule, see Noah Zuss, Health Care Plan Sponsors Shorten Vesting Periods to Attract Talent, Plansponsor (June 29, 2022), https://www.plansponsor.com/health-care-plan-sponsors-shorten-vesting-periods-attract-talent/ [https://perma.cc/BAG3-7ZAP].

[47] According to PSCA’s employer contribution data, 50.5% of plans surveyed offer only matching contributions and 86.4% offer matching either alone or in tandem with other types of contributions. Plan Sponsor Council of Am., supra note 33, at 39 Table 58. By way of example, Microsoft’s 401(k) plan offers a fully-vested 50% match on employee salary deferrals up to the IRS deferral limit. See 401(k) Savings Plan, Microsoft, https://usbenefits.microsoft.com/us/en/401k-plan.htmlhttps://usbenefits.microsoft.com/us/en/401k-plan.html [https://perma.cc/5N6G-74H6] (last visited Sep. 25, 2025).

[48] See Suzanna Fritzberg & Ksenia Shadrina, Spotlighting Women’s Retirement Security, U.S. Dept. of Treasury (Sep. 20, 2024), https://home.treasury.gov/news/featured-stories/spotlighting-womens-retirement-security [https://perma.cc/L576-7VEB] (“Multiple studies indicate that women are disadvantaged across all such sources: they tend to receive lower Social Security benefits, have lower retirement account ownership rates and lower estimated retirement account balances, and own fewer assets than men.”).

[49] Prince, Azizkhan, Prince & Gorman, supra note 35, at 24; Michelle Travis, 3 Reasons to Require Greater Retirement Benefits Transparency, Forbes (July 31, 2024), https://www.forbes.com/sites/michelletravis/2024/07/31/3-reasons-to-require-greater-retirement-benefits-transparency/ [https://perma.cc/R5UH-BHQB]; Makailah Gause, Women in U.S. Have Just 1/3 of Men’s Retirement Savings, Prudential Report Says, Reuters (June 24, 2024, at 15:14 ET), https://www.reuters.com/world/us/women-us-have-just-13-mens-retirement-savings-prudential-report-says-2024-06-24/ [https://perma.cc/ETZ3-6X4P]; Lorie Konish, Retirement Account Balances Have Increased Substantially for High-Income Households. These Factors Help Explain Why, CNBC: Your Money (Aug. 1, 2023, at 08:00 ET), https://www.cnbc.com/2023/08/01/retirement-account-balances-have-increased-for-high-income-households.html?utmhttps://www.cnbc.com/2023/08/01/retirement-account-balances-have-increased-for-high-income-households.html?utm [https://perma.cc/3DB4-X57Z].

[50] See Women’s Earnings Were 83.6 Percent of Men’s in 2023, The Econ. Daily (Mar. 12, 2024), https://www.bls.gov/opub/ted/2024/womens-earnings-were-83-6-percent-of-mens-in-2023.htm. [https://perma.cc/U5P6-H9XL]; The Not So Simple Truth About the Gender Pay Gap: 2025 Update, Am. Ass’n Univ. Women (Feb. 2025), https://www.aauw.org/app/uploads/2025/03/The_Simple_Truth_Gender_Pay_Gap_2025.pdf [https://perma.cc/A8BF-37WW]; Women Earn Less than Men Whether They Work in the Same or Different Occupations: Occupational Wage Gap Fact Sheet, Inst. for Women’s Pol’y Res. (Mar. 2024), https://iwpr.org/wp-content/uploads/2024/03/Occupational-Wage-Gap-2024-Fact-Sheet-1.pdf [https://perma.cc/5KCA-VAQ9].

[51] See Robin Bleiweis, Quick Facts About the Gender Wage Gap, Ctr. for American Progress (Mar. 24, 2020), https://www.americanprogress.org/article/quick-facts-gender-wage-gap/ [https://perma.cc/92YV-JHCJ]; Lydia DePillis, Jeanna Smialek & Ben Casselman, Jobs Aplenty, but a Shortage of Care Keeps Many Women From Benefiting, The N.Y. Times (July 7, 2022), https://www.nytimes.com/2022/07/07/business/economy/women-labor-caregiving.html [https://perma.cc/6VG9-D638]; Kim Parker, Women More than Men Adjust Their Careers for Family Life, Pew Research Ctr. (Oct. 1, 2015), https://www.pewresearch.org/short-reads/2015/10/01/women-more-than-men-adjust-their-careers-for-family-life/ [https://perma.cc/6TPY-M8HS]; Stephanie Ferguson Melhorn & Isabella Lucy, Data Deep Dive: Women in the Workforce, U.S. Chamber of Com. (June 26, 2024), https://www.uschamber.com/workforce/data-deep-dive-a-decline-of-women-in-the-workforce [https://perma.cc/28ND-M7EJ].

[52] See Fritzberg & Shadrina, supra note 48. This is also true of women’s Social Security savings. Grace Enda & William Gale, How does gender equality affect women in retirement?, Brookings (July 2020), https://www.brookings.edu/articles/how-does-gender-equality-affect-women-in-retirement/ [https://perma.cc/95YU-JV7X].

[53] Travis, supra note 49.

[54] Professor David Pratt has also suggested changing the way that employer contributions are calculated in his proposed solutions for insufficient contributions. Pratt, supra note 39, at 344-346.

[55] Some 401(k) plan structures contain safe harbors that allow flat, non-elective contributions as an option instead of matching, such as Qualified Automatic Contribution Arrangements (QACA) 401(k) plans (in lieu of matching, an employer can choose to make 3% non-elective contributions regardless of an employee’s deferrals) and SIMPLE 401(k) plans (in lieu of matching, an employer can choose to make a 2% non-elective contribution. See Operating a 401(k) Plan, Internal Revenue. Serv. (Aug. 26, 2025), https://www.irs.gov/retirement-plans/operating-a-401k-plan#:~:text=Employer%20contributions%20to%20a%20SIMPLE%20401(k)%20plan,percent%20of%20pay%20for%20each%20eligible%20employee [https://perma.cc/3N6F-8PKH]; Quinn Curtis, Leo E. Strine, Jr. & David H. Webber, Rebalancing Retirement: How 401(k) Plans Exacerbate Inequality and What we Can Do about It, 30 Stan. J.L. Econ. & Bus. 401, 439 (2024).

[56] Margarida Correia, Employers Urged to Change 401(k) Contributions to Shrink Racial, Income Disparities, Pensions & Invs. (Nov. 30, 2023, at 08:15 ET), https://www.pionline.com/defined-contribution/employers-urged-change-401k-contributions-shrink-racial-income-disparities/ [https://perma.cc/92EV-L8TA].

[57] See Gregory Crawford, Companies from Facebook to JPMorgan Squeeze 401(k) Plans, Investment News (Feb. 3, 2014), https://www.investmentnews.com/retirement-planning/companies-from-facebook-to-jpmorgan-squeeze-401k-plans/56484 [https://perma.cc/9YYV-27E2].

[58] Id.

[59] 401(k) Plan Fix-It Guide, Internal Revenue Serv. (Aug. 26, 2025), https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-you-havent-timely-deposited-employee-elective-deferrals [https://perma.cc/Y8U2-BNU2]. Safe harbor 401(k) plans are required to deposit the safe harbor matches owed for each quarter by the end of the next quarter. See Joni L. Jennings, 401(k)ology—What Happens When Contributions are Deposited Late?, Newfront (July 24, 2025), https://www.newfront.com/blog/401kology-what-happens-when-contributions-are-deposited-late [https://perma.cc/JV5E-QUT3].

[60] Internal Revenue Serv., supra note 59.

[61] See Prince, supra note 44, at 37, 84-85. See also Kirsten “Shaw” Mettler, Effective Pay Transparency Requires Benefit Transparency, Harv. L. Rev. Blog (Nov. 21, 2024), https://harvardlawreview.org/blog/2024/11/effective-pay-transparency-requires-benefit-transparency-h-4890/ [https://perma.cc/745E-6XSA] (noting that like wage or salary disclosure, benefits transparency can shrink the wage gap due to empowering women job seekers in negotiations).

[62] Prince, supra note 44, at 61-62.

[63] Id. at 42.

[64] Id. at 87, 90.

[65] Connor, supra note 8, at 356.

[66] Jeff Schwartz, Rethinking 401(k)s, 49 Harv. J. on Legis. 53, 59 (2012) (Financial illiteracy presents more in “women, African Americans, Latinos, those with less education, and those with lower incomes.”). See Anna Tranfaglia, Alicia Lloro & Ellen Merry, Question design and the gender gap in financial literacy, Fed. Rsrv. Bd. (Jan. 2, 2024), https://www.federalreserve.gov/econres/notes/feds-notes/question-design-and-the-gender-gap-in-financial-literacy-20240102.html [https://perma.cc/5RD5-S7YC]; Prince, supra note 13, at 38-43. Adding to the complexity is Trump’s policy broadening 401(k) plan investments to include private assets such as cryptocurrency, real estate, and gold. Exec. Order No. 14,330, 90 Fed. Reg. 38921 (Aug. 7, 2025). These assets, which also include private equity, are confusing, come with high fees, are illiquid, and are highly volatile. Emily Guy Birken, Here’s Why Trump’s Proposed 401(k) Executive Order May Be Very Bad News for Your Retirement, Fast Co. (July 25, 2025), https://www.fastcompany.com/91373389/heres-why-trumps-proposed-401k-executive-order-may-be-very-bad-news-for-your-retirement [https://perma.cc/6JGB-LJQZ]. Allowing such investments in target-dated funds or other managed funds as 401(k) potential investment choices can be detrimental especially without proper education or regulation. Id.

[67] Barbara A. Butrica & Karen E. Smith, 401(k) Participant Behavior in a Volatile Economy 3 (Ctr. for Ret. Rsch. B.C. WP 2012-24, 2012), https://crr.bc.edu/wp-content/uploads/2012/10/wp_2012-24-5081.pdf [https://perma.cc/W5EB-ZQEL].

[68] Annamaria Lusardi, Financial Literacy and the Need for Financial Education: Evidence and Implications, 155:1 Swiss J. Econ. & Stat. 1, 1, 4, 5 (2019); Karen Bennett, Building Financial Independence for Women through Financial Literacy, Bankrate (Mar. 25, 2025), https://www.bankrate.com/banking/women-and-financial-literacy/#impact [https://perma.cc/85MJ-XY6D]. In Schwab’s 2025 Workplace Survey of 401(k) Plan Participants, only 27% of individuals surveyed were confident to make investment decisions on their own, whereas with professional help the number jumped to 51%. 2025 Workplace Survey 401(k) Plan Participants, Charles Schwabb (July 2025), https://content.schwab.com/web/retail/public/about-schwab/schwab_2025_401k_participant_survey_findings.pdf [https://perma.cc/F6UL-2B8K]. Financial literacy and investment education is showing positive results in younger generations. “In 2022, 39 percent of 23-year-olds owned stock versus 31 percent of 23-year-olds in 2007.” Lisa Rabasca Roepe, Gen Z, It Turns Out, Is Great at Saving for Retirement, The N.Y. Times (June 28, 2025), https://www.nytimes.com/2025/06/28/business/retirement/gen-z-retirement-savings.html?utm_campaign=2025-07-09-FSP&utm_medium=email&utm_source=Pew&subscriberkey=00QPm000009f2v8MAA [https://perma.cc/C49E-JDUV]. Stock balances were also higher, comparatively. Investing in 401(k) plans is trending with Gen Z women; more Gen Z women (54 percent) were saving in their 401(k) plans than Gen Z men (44 percent). Id.

[69] The existence of market fluctuations at any given time is only one factor impacting account balance values. The uncertainty about market and economic conditions also impact business decisions and may prompt employers to implement cost-cutting measures including the elimination of their matching contributions, thereby making it harder to accumulate wealth. Megan Sims, Sherwin-Williams suspends 401(k)-matching amid weak sales, Cleveland.com (Sep. 4, 2025), https://www.cleveland.com/news/2025/09/sherwin-williams-suspends-401k-matching-amid-weak-sales.html [https://perma.cc/L3ZY-665J].

[70] See Scott Lincicome, America’s Perón, The Atlantic (Sep. 7, 2025), https://www.theatlantic.com/economy/archive/2025/09/trump-peron-argentina-economy/684117/ [https://perma.cc/PZ3K-SKJ2]. Stephen Groves, Trump’s Tax Law Will Mostly Benefit the Rich, While Leaving Poorer Americans with Less, CBO Says, Associate Press (Aug. 11, 2025, 23:52 ET), https://apnews.com/article/trump-tax-cuts-food-stamps-6542e448a2f6ed7b93ab8f7fe84ac53a [https://perma.cc/U7MM-J3QF]. Candice Helfand-Rogers, Experts Say Trump’s Anti-DEI Crusade Has Hurt Black Women the Most, The Story Exch. (Aug. 25, 2025), https://thestoryexchange.org/experts-say-trumps-anti-dei-crusade-has-hurt-black-women-the-most/ [https://perma.cc/7UJ7-4793] (stating that the U.S. Bureau of Labor Statistics revealed that roughly 300,000 Black women left the nation’s labor force in a three-month period as a result of new anti-DEI policies).

[71] See e.g., Voya Investment Management, Survey of the Retirement Landscape: Plan Sponsor Sentiments 14 (2025) (finding 88% of plan participants stated interest in receiving investment guidance for their retirement plan). The survey further found that over 80% “said they are very or somewhat interested in education on retirement income planning, online tool and calculators, education on the cost of health care in retirement, and education on investing.” Id. at 16.

[72] Roepe, supra note 68 (Noting examples of financial literacy and investing podcasts specifically aimed at Gen Z: “Money Moves, How to Money, the Money with Katie Show, and More Money.”). Another suggestion is proffered via the bill entitled the Women’s Retirement Protection Act of 2025. Baldwin, supra note 31. The bill requires that a link to the Consumer Financial Protection Bureau be provided to help “bolster women’s financial literacy.” Id.

[73] In Morgan Stanley’s 2025 State of the Workplace Financial Benefits Study, 47% of employees stated they would like access to a financial advisor to assist with retirement planning. Morgan Stanley at Work, supra note 44.

[74] See id.

[75] Warren, Marchant, Schulze & Chung, supra note 7 at 499-501; Einat Peled & Karni Krigel, The Path to Economic Independence Among Survivors of Intimate Partner Violence: A Critical Review of the Literature and Courses for Action, 31 Aggression and Violent Behav. 127, 134 (2016).

[76] Peled & Krigel, supra note 75, at 128-29, 133 (stating such programs should also acknowledge the emotional aspects of violence, which may include a focus on coping with the post-traumatic effects of the abuse they have experienced).

[77] See generally Kimberly Blanton, Americans Say They Need a Finance Class, Ctr. For Ret. Rsch. B.C. (May 24, 2022) https://crr.bc.edu/americans-say-they-need-a-finance-class/ [https://perma.cc/9SBP-UKJE] (reporting on research showing demand for financial literacy classes, and that financial education is effective); Robert L. Clark, Melinda S. Morrill & Steven G. Allen, Reorienting Retirement Risk Management 41-53 (Robert L. Clark & Olivia S. Mitchell eds., 2010) (study found encouraging results on the effectiveness of employer-provided programs in increasing financial literacy regarding retirement programs).