Under federal law, you owe a broad, fiduciary legal duty to your 401k participants. This includes former employees who keep a 401k account with you. Participants can file lawsuits against you on several grounds, including if they think their fees are too high or investment options were poor. Unfortunately lawsuits are a real risk (“
401k lawsuits are surging”). Former employees who keep their 401k account are eligible to file these lawsuits. Helping them transfer their 401k when leaving reduces your legal risks.