Daniel Aronowitz, President Donald Trump's pick to head the Labor Department's Employee Benefits Security Administration, which writes retirement policy, has yet to be confirmed by the full Senate. Once he is, though, retirement planning officials predict he may help write a new rule to address fiduciary advice regarding rollovers.
Aronowitz, founder and managing principal of Euclid Specialty, a company that sells fiduciary insurance to the managers of nonprofit employer benefit plans and multiemployer benefit plans, stated in early June in testimony before the Senate Health, Education, Labor and Pensions Committee that among his goals as EBSA chief would be to "strive to provide regulatory clarity to the fiduciary rule as applied to IRA rollovers."
Labor plans to issue a fiduciary rule in May 2026, according to its just-released regulatory flexibility agenda.
Retirement planning experts, including former EBSA chiefs, weighed in with me recently about what they think Aronowitz's comment potentially means.
"It sounds like Aronowitz is thinking about a new rule rather than rescinding" the Biden-era fiduciary rule, Phyllis Borzi, who led EBSA in the Obama administration, told me in a recent email.
"I'd be pretty surprised if they aren't already working on something," Ali Khawar, an EBSA official under President Joe Biden, added in another message. "I would suspect they [Labor] are working on whatever their approach is — a new rule and/or exemptions or a reversion to the 5-part test" to determine who's a fiduciary under the Employee Retirement Income Security Act.
"I haven't heard about anything really imperiling his [Aronowitz's] nomination so I would expect the confirmation vote to happen in the next few months," Khawar added.
New Rule Focus
Any potential new rule would focus on how fiduciary rules under ERISA "apply to advice concerning rollovers to IRAs (including the decision to rollover and where to invest the money)," Borzi said. This "is probably the most controversial aspect" of the current fiduciary rule.
"Practically, I don’t see the Biden rule being something DOL currently wants to see go into effect," added ERISA attorney Fred Reish of Faegre Drinker.
Labor under the Trump administration "will likely rescind and replace the rule, but we don’t know that for sure yet," Reish added. "This will be an issue for the next two years."
There’s a chance Labor will "go back to the 1975 five-part test" to determine who's a fiduciary under ERISA, Reish continued. "I don’t think the Trump DOL will act to support the Biden-era regulation, particularly the one-time recommendation of a rollover being a fiduciary act."
Rescinding the Biden-era rule would be quicker than writing a new rule, Borzi added, "but it is not so clear what the [new] standard will be going forward — maybe a return to the 5-part test but maybe not and what does that mean?"
Court Rulings
The two court decisions finding that one rollover transaction cannot start an "ongoing advice relationship" do not materially affect the 2024 fiduciary rule, ERISA attorney Brad Campbell of Faegre Drinker said in mid-July.
Two Texas courts have stopped the fiduciary rule from taking effect.
"The two cases — which apply only to the halt, not to the rule itself — have been consolidated in the U.S. Court of Appeals for the 5th Circuit," Campbell relayed.
DOL had until mid-August to respond and requested an additional 60 days to get organized.
As it stands now, DOL and the Justice Department "are negotiating with the plaintiffs in the Fifth Circuit appeal of the Biden era fiduciary rule," Reish said in an email. "It is possible that they could agree that the Biden era regulation could be vacated, which would automatically reinstate the old fiduciary regulation — if the court agrees with those settlement terms."
While it's possible that a new regulation could be proposed, Reish continued, "I don’t know how it would vary from the old one. If they did, it would likely be an 18-month process before being finalized. For that, we would probably need to wait until Aronowitz is confirmed and the EBSA makes a decision about whether to work on a new regulation."
Fiduciary Reg in 2026
The reg action, according to Labor's reg flex agenda, is in response to President Donald Trump's Executive Order 14219, "Ensuring Lawful Governance and Implementing the President's Department of Government Efficiency'" deregulatory initiative, and in light of the two Texas courts stopping the fiduciary rule from taking effect.
"The reference to the deregulatory executive order suggests that the DOL will be withdrawing a regulation and the reference to the cases are about the Biden era fiduciary regulation," said ERISA attorney Reish.
"Putting the two together, the probable interpretation is that the DOL intends to withdraw the Biden regulation," Reish added. "Realistically, though, the DOL probably won’t do that until they have negotiated a settlement of the two lawsuits. That could happen in the near future."
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