DOL Rule List Focuses on Alts, End of ESG

The Department of Labor will focus heavily on fiduciary rules and SECURE 2.0 guidance, according to the newly published 2026 Unified Agenda.

The rule lists, posted by the DOL and the Department of the Treasury, revealed that the Employee Benefits Security Administration is again reworking “Prudence and Loyalty in Selecting Plan Investments,” often called the ESG rule, and “Fiduciary Duties in Selecting Designated Investment Alternatives,” commonly referred to as the alts rule.

The ESG rule, which has shifted over the last three presidential administrations with the change of parties in power, determines how much freedom fiduciaries have to consider environmental, social and governance factors and other nonfinancial factors when building retirement plan qualified default investment alternative options and investment menus. Under the first administration of President Donald Trump, from 2017 to 2021, DOL guidance required that only pecuniary factors be considered in investment decisions, a stance the latest proposed guidance, now pending before the White House, is expected to reaffirm. Under former President Joe Biden, from 2021 to 2025, ESG factors were allowed to be considered as tiebreakers.

The alts rule, which has entered into the final rulemaking phase after its comment period ended in June, would create a fiduciary road map for selecting any investment options for a defined contribution plan, including any that included alternative assets, such as private equity or private credit.

EBSA is also advancing “Performance Benchmarks for Multi-Asset Class Investments,” which bears on target-date-fund benchmarking disclosures, and a redefinition of “adequate consideration” for employee stock ownership plan valuations. A rule amending prohibited transaction exemption procedures could also affect how sponsors and asset managers structure exemption applications going forward.

Meanwhile, at Treasury, the IRS is moving several pieces of overdue SECURE 2.0 Act of 2022 guidance into final rule stage, including updates to required minimum distribution rules; long-term, part-time employee rules for 401(k) plans; and automatic enrollment requirements.

The RMD changes from the 2022 law made calculations more flexible for accounts that are partly invested in annuities, reduced the penalty for missed RMDs when they are corrected promptly, eliminated lifetime RMDs from Roth accounts in employer-sponsored plans, and gave surviving spouses more favorable options for taking inherited retirement benefits.

The part-time employee change allows long-term, part-time employees to make elective deferrals if they satisfy certain age and service requirements. The automatic enrollment requirements generally requires newly established 401(k) and 403(b) plans to automatically enroll eligible employees in the plan.

On the health and welfare side, EBSA will continue working on mental health parity requirements, electronic disclosure safe harbors for group health plans and an “Independent Dispute Resolution Operations” rule tied to No Surprises Act billing disputes.

Much of the agenda remains in proposed or pre-rule stage. Guidance in the pre-rule or proposed stage will be subject to a public comment period before a final rule is issued.

The rule also included pre-rule stage guidance on pooled employer plans, established under the SECURE Act of 2019. The guidance states that the rule will explore the need for regulatory guidance to implement any ERISA amendments made in the SECURE Act provisions that established PEPs.