Retirement plan administrators are likely entering a regulatory phase in which the Department of Labor is more focused on giving employers defensible fiduciary processes than second-guessing plan decisions, panelists said at the 2026 PLANSPONSOR National Conference.
During the event’s “Washington Update” session on Tuesday in Nashville, Tennessee, legal experts highlighted how the retirement policy agenda of President Donald Trump’s administration has centered on creating clear fiduciary processes for plan advisers and sponsors to follow, rather than relying on the outcome of litigation to clarify fiduciary standards.
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Panelists said the DOL’s recent actions suggest a concerted effort to reduce what the department has described as years of uncertainty and litigation-driven policymaking under the Employee Retirement Income Security Act.
Brad Campbell, a partner in law firm Faegre Drinker and a former head of the DOL’s Employee Benefits Security Administration, said the agency’s approach, outlined by current EBSA Head Daniel Aronowitz earlier in the conference, could address the effect class action litigation has had on plan design and benefits innovation.
“ERISA litigation is chilling innovation by all of you,” Campbell said, speaking primarily to a room of plan sponsors.
Proposed Safe Harbor
The most immediate focus is the DOL proposal on fiduciary duties in selecting designated investment alternatives. Though prompted by an executive order associated with private markets and alternative assets, panelists emphasized that the rule is broader than private equity or cryptocurrency: It is, they said, fundamentally, a fiduciary-process rule.
Andy Banducci, senior vice president of retirement and compensation policy at the ERISA Industry Committee, said large employers want stable rules that do not change from administration to administration. The proposed safe harbor, he said, could provide a clearer road map for sponsors evaluating investment options, provided courts still give it weight, given the Supreme Court’s 2024 Loper Bright decision that ended the so-called Chevron deference to federal policymakers.
“Our guys just want to know what the rules are, right?” Banducci said. “We just want to know if we do X, Y and Z, how do we not get sued.”
Chevron deference had given sub-regulatory guidance, such as rules or guidance from the DOL, significant weight in courts. After Loper Bright, courts do not need to give added weight to governmental agencies when deciding cases.
Campbell said the DOL’s proposal restates long-standing ERISA principles that sponsors should be judged by the processes they use instead of the outcomes they achieve. He also the proposal offers clarity about the idea that fiduciaries need not choose the cheapest option if higher fees are justified by greater value. But he warned that sponsors will likely need to revise investment policy statements and committee documentation if the proposed rule is finalized in roughly its current form. The 60-day comment period on the rule ended on June 1.
Bradford Huss, a director at employee benefits law firm Trucker Huss APC, said the proposal’s detailed examples could help both sides in litigation. Plaintiffs may try to use the examples as templates for claims, he said, while defense counsel may point to them as evidence that a committee followed an approved process.
“The rule itself is really all about fiduciary process,” Huss said.
ESOPs, Fiduciary Rule
Regarding employee stock ownership plans, panelists said the DOL appears poised to replace decades of enforcement-driven valuation policy with formal rulemaking on adequate consideration. Campbell described existing policy as effectively “regulation by enforcement,” while Huss said clearer standards will help plan sponsors in private ESOP litigation.
Aronowitz has made no secret of his desire to prevent ESOPs from facing regulatory scrutiny. He pledged, during his confirmation hearing in 2025, to “end the war on ESOPs,” and EBSA this year has removed ESOPs from its enforcement priorities.
The discussion also covered the now-vacated Retirement Security Rule, which was finalized by the administration of former President Joe Biden. It set a new fiduciary standard that expanded fiduciary obligations under ERISA to include professionals providing one-time professional retirement investment advice, such as recommendations on rollovers into individual retirement accounts, annuity purchases and plan menu design. The rule was officially vacated in March.
Campbell said rollover advice has largely returned to the pre-2008 framework, meaning many retail rollover recommendations will be regulated by the Securities and Exchange Commission, Financial Industry Regulatory Authority, banking regulators or state insurance officials, rather than the DOL. Huss cautioned that some sponsors may still want retiring participants to remain in employer plans that offer low fees and fiduciary oversight, rather than rolling out into other investment products.
Though the panel mostly agreed with the priorities being outlined by the DOL, several panelists noted that regulators have much work to do to provide clearer guidance with finalized rules on such topics as Trump Accounts.
In response to an audience question about how federal policy changes have benefitted everyday plan participants, Campbell pointed to automatic enrollment, which has enabled many workers to save more for retirement.
“The guy getting $25 an hour is going to have a better retirement than he otherwise would have,” Campbell said.
Trump Accounts
The panel also addressed the arrival of Trump Accounts, created by last summer’s One Big Beautiful Bill Act, often described as savings accounts for kids or “baby IRAs,” scheduled for launch on July 4. Campbell said the accounts resemble individual retirement accounts for children, but employers that want to make contributions are still waiting for guidance from the Department of the Treasury, the IRS and the DOL on how they can do so without inadvertently making the accounts a benefit subject to ERISA.
Banducci said some large employers are eager to participate in the Trump Account program but lack answers about the program’s mechanics, tax treatment, trustees and permitted investments. The IRS and Treasury have released some guidance on the accounts, but as the panel pointed out, several issues need clarification.
The accounts can be opened for any child younger than age 18 who has a Social Security number. They will be treated as traditional IRAs under Section 408 of the Internal Revenue Code but also will have special “growth period” rules applicable until the year the child turns 18.
During the growth period, Trump Account funds may be invested only in certain low-cost, index-tracking equity investments, and account holders may not make withdrawals except in limited cases such as qualified rollovers or the death of the beneficiary. The indexed funds must track U.S. equity markets. When the beneficiary reaches age 18, the account converts to a regular IRA, with typical tax rules applying to withdrawals and early-distribution penalties.
