The U.S. Department of Labor has announced plans to revisit and likely revise the fiduciary-advice rule in 2026, signaling significant potential shifts for plan sponsors and advisers.
Here are my key takeaways:
· At issue is the definition of “fiduciary adviser” under ERISA. The current rule — known as the “Retirement Security Rule” — is still tied up in litigation in the 5th Circuit.
· The DOL’s regulatory agenda offers little detail on exactly how the rule will change, stating only that the new regulation “will ensure that the regulation is based on the best reading of the statute.”
· Two realistic pathways:
1. Rescind the existing rule outright, reverting to the 1975 standard.
2. Rewrite the rule: either amend the current structure or overhaul it from scratch.
· A wrinkle: the DOL may also seek to consolidate multiple guidance items (like Prohibited Transaction Exemption 2020-02) into one coherent fiduciary framework. That would help reduce fragmentation and confusion.
· Timing and priorities matter. With ESG, alternatives, government funding, and staffing constraints all in play, it’s far from guaranteed the DOL will finalize a new rule by its target date.
Why this matters If your role involves advising, sponsoring, or managing retirement plans, this rulemaking could alter who is deemed a fiduciary, what advice triggers fiduciary status, how compensation is treated, and how plan fiduciaries oversee advisers. Governance, contracts, disclosures, and adviser-selection processes may all need revision.
My takeaway While the exact form remains unclear, the fiduciary landscape is headed for change. Plan sponsors and advisers should stay ahead: revisit current adviser arrangements, consider where fiduciary risk may exist now, and plan for adjustments to governance and oversight. The fiduciary bar may not get lowered, it might just shift.