The 2025 National Association of Plan Advisors conference kicked off in Las Vegas on Monday with a mainstage interview featuring NAPA President Brian Graff and Preston Rutledge, a former Labor Department official.
The pair dug into the many ways the DOL, particularly the Employee Benefits Security Administration (EBSA), could act under the second administration of President Donald Trump to reshape retirement planning policy across the United States. From easing fiduciary regulations to the promotion of alternative assets, there’s a lot on the table.
According to Rutledge, who was the assistant secretary of labor in charge of EBSA during Trump’s first term, the current nominee to lead EBSA — benefits industry executive Daniel Aronowitz — has a few personal priorities that could have a significant effect on the operation and regulation of 401(k) plans. The president and his inner circle will likewise have priorities that will "naturally take some degree of precedence."
“So, it’s still somewhat early days in terms of exactly what policies will be pushed the hardest, but we should soon start to get some clarity on that,” Rutledge told the crowd of nearly 3,000 advisors and retirement industry staffers. “If you’re interested in learning about Aronowitz’s perspectives, he’s actually written a lot about his would-be priorities in a long-running blog. He's got a lot of relevant experience for the job, which should be a good thing for advancing retirement policy during his tenure.”
When it comes to the president and his close advisors, it’s "still more of an open question" in terms of priorities, according to Rutledge, but he expects additional executive orders to emerge soon that could speak to retirement planning issues.
“That happened as I was still pending as the EBSA nominee back in the first administration,” Rutledge recalled. “It spoke to the importance of expanding access to retirement plans for more workers, and that fed directly into the success of the first Secure Act.”
Trump’s Potential Priorities
Regarding the president’s priorities, the theme of “expanding access” could return, Rutledge suggested. This could take the form of directing the EBSA to give retirement savers more access to alternative investments, including cryptocurrencies, private equity, private credit and real estate.
Another likely priority is addressing the “neverending” fiduciary rule issue, Rutledge said, but that question is currently in the hands of a Texas appellate court that has proven to be sympathetic to many of the president’s anti-regulatory policy positions in the past.
“The 5th Circuit in Texas is in the driver's seat on this, and they literally already tossed out a version of the fiduciary rule back in 2018,” Rutledge said. “If I were advising the president, I’d say the best course on fiduciary rule is to wait for the court and hope — with a solid expectation of success — that the court will take care of this problem for you. That will free up a lot of resources to tackle the other issues.”
Confronting the ERISA Litigation Wave
One of Aronowitz’s likely priorities, according to Rutledge, is easing the pressure large and mega-size employers are facing from fiduciary breach litigation filed under the Employee Retirement Income Security Act.
“It’s a highly complex and challenging issue for bigger employers who are trying to deliver retirement savings benefits to the workforce, and the current policy environment is not helping, especially in the wake of a recent Supreme Court ruling in a case known as Cornell,” Rutledge explained.
Taken at a high level, Aronowitz and others have argued, Cunningham v. Cornell University has taken fiduciary-breach litigation over excessive fees to the point of absurdity. In the case, the high court sanctioned a well-known plaintiffs’ attorney’s position that a prohibited transaction claim under ERISA can be filed with "bare-bones allegations" that an employee benefit plan entered into a service provider contract — something that is essential to run every modern plan.
“In other words, you can file a prohibited transaction claim alleging excessive fees and get to the discovery phase without any actual proof that the fees were excessive or based on an imprudent fiduciary process,” Rutledge said. “The attorney's game is to win settlements that let big employers avoid the expense of discovery, not to win cases, so it’s not a great position for plan sponsors to be in, and it’s something that is definitely concerning for many parties — including folks in the new administration.”
According to Rutledge, the Supreme Court’s recent rulings on this and related matters make it clear that the judges themselves aren’t exactly thrilled with this status quo, but they have unanimously and consistently concluded that this is a problem for Congress to address.
“They’re basically saying that Congress has been way too lazy on this topic, relying far too much on regulators in the administrative branch to set and enforce standards,” Rutledge said. “My sense is that Congress will have a very hard time solving this, given the close margins, but there are some potentially interesting things EBSA could do by arguing the fees and judgment awards going to the plaintiffs attorneys are inappropriate uses of plan assets. It’s an open issue that I’ll be watching closely.”
Credit: Gage Skidmore via Wikimedia Commons
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.