DOL ERISA Regulations 2026: What Every Fiduciary, Investor & Plan Sponsor Needs to Know Major new proposed regulations from the Department of Labor are currently under review, and they could significantly impact how retirement plans are managed and how private assets are utilized.
Jeffrey Snyder, Broadcast Retirement Network
Three, two, one. Andrew, it’s great to see you. Thanks for joining us this morning.
Andrew G.I. Kilberg, Gibson Dunn
Oh, happy to be here. Thanks for having me. You know, it’s a sort of a niche topic, but I think it’s an important one and one that, you know, a lot of people at least here in D.C. have been talking about the last few months.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. I think it’s I agree with you. I think it’s niche, but there are a lot of retirement.
Look, if you are in our business or outside our business, these are the types of things that impact you. So, you know, your analysis and the work you and the firm are doing very important, I think, to kind of setting the overall, you know, just explaining kind of what’s going on. So let’s let’s kind of dive into it as as people, obviously, who will follow the program, watch you, read you, whatever.
No, there are some new proposed regulations that recently came out from the Department of Labor. There was a comment period that allowed people to respond. You and your firm actually took it upon yourselves to review those comments.
Let me start by asking you, could you categorize the comments? I mean, I think there were like 30,000, 40,000 of them. So you sifted through a lot, but could you categorize those comments?
Andrew G.I. Kilberg, Gibson Dunn
Yeah. You know, I’ll try to give you the short form of it. If you want to if your viewers want to look in more detail, just Google my name, go to my bio, scroll all the way down to the bottom, you can find a link to our to our white paper, which is something about seven or eight pages.
So, yeah, you’re right. There’s well over 40,000 comments. That’s not unusual for high profile rulemaking like this one.
I serve the Department of Labor, the tail end of the first Trump administration working directly as a senior staffer for Secretary Scalia. For example, the independent contractor rule had, I think, about around the same number of comments. And what we’ve seen really probably the last decade or so is more sophisticated efforts.
People become more practiced at soliciting essentially form comments. They put out a template out there. You add your name, maybe you adjust a detail or two, but effectively the same thing.
So when we looked at this docket around mid-June, so the numbers might be a little bit off right now, more posted later by the department, is of those more than 40,000 comments. The vast majority were some form of form comment, a template comment. And when we counted, there were about 12,000 that were in support of the rule and around 31,000 that opposed it.
But when the department, other agencies are engaged in these types of rulemakings, these types of raw numbers are not really the game. They’re not unimportant. The department will look at what they say.
But just because you have X number in support, Y number opposed, isn’t what’s really going to move the ball in any kind of meaningful way. Because comments that say, I love this or I hate it, aren’t really truly substantive. They don’t tell you anything about the substance of the proposal.
So what we did is we drilled in and we tried to identify, what are the really substantive comments here that we think the department is going to focus on? And there are maybe a little bit more than 200 that we thought fit in that bucket. Generally, 500 words or longer as a proxy, some of which were well over 100 pages when you look at all the supporting documentation that they provided.
And of that, I think there was a pronounced majority that was in support of the rule, roughly around 120 in support to around 100 that are opposed. Of course, this is an infallible designation. Some comments may be softly opposed, softly support.
One example that stuck out to me was from a comment from the CFP board, which represents financial planners. They were generally supportive of an asset neutral approach, but overall were categorized as a negative comment. It was not in support of this particular proposal.
Jeffrey Snyder, Broadcast Retirement Network
Interesting. So let me follow up because I’m really interested. Let’s jump down on maybe some particular groups because obviously you mentioned the CFP board, but they’re going to be all different groups, not-for-profits, everybody and their mother, people in the industry responding.
I’m particularly interested in any responses from fiduciaries, plan sponsors, or maybe advisors that are 321 or 338. Of course, I’m interested in all the comments, but really they’re because these are the people that ultimately have fiduciary responsibility and are going to be making the selection. So any insight into what those folks commented on and what they were possibly thinking?
Andrew G.I. Kilberg, Gibson Dunn
Yeah. In support of the rule, you saw commenters from pretty much every corner of the retirement ecosystem. With respect to investment advisors and consultants to plans and plan sponsors, I think they were broadly supportive.
Two comments stuck out to us when we were looking at it from that group. One, the American Retirement Association supported the rule and offered what it termed I think were refinements to try to minimize the chance that the rule might be misinterpreted and used to actually generate new forms of claims or pleading disputes. And then second, Aon, one of the biggest players in the consulting side, submitted its own comment that I think said it was a very positive step forward mitigating some of that litigation and regulatory uncertainty that’s been plaguing and increasing, frankly, over the last 10, 15 years.
But I think when we talk about fiduciaries, obviously your listener base might be more in the investment advisor community, but I think it’s really important not to lose sight of the plan sponsors themselves. I mean, a lot of the litigation that’s out there that’s really been plaguing the industry is targeting the plan sponsors directly. And we saw overwhelming support for the rule from plan sponsors.
I mean, the four, what I think of the four major plan sponsor organizations all came out very supportive. The RISD Industry Committee, known as ERIC, American Benefits Council, Chamber of Commerce, and Saiba, which I always question whether I’m pronouncing their acronym correctly. Beyond that, you also had the Investment Company Institute, other asset managers and record-keeping organizations like SPARC.
The Alternative Asset Industry obviously is very interested in this, American Investment Council, Managed Funds Association, DeColta, many others commenting here. We even saw support coming from other types of plan sponsor organizations that you wouldn’t typically think would be interested in ERISA. So the International Franchise Association, Hispanic Leadership Fund, groups that are representing companies.
And I think it shows that this is an issue that is really wide ranging and that people really want to make sure that their employees are able to access a broad range of options and choice and not be held back by this ERISA litigation risk, which ultimately is kind of leveled down so that people aren’t getting the exposure to the whole market that’s out there.
Jeffrey Snyder, Broadcast Retirement Network
Thank you for that. Let me ask you about the digestion or ingestion of the comments by the Department of Labor. Since you actually sat in that seat and maybe not related to this role, but you sat in terms of ingesting, what are the kind of the next steps?
I mean, how long does it typically take? I mean, 40,000 comments, you said, maybe not all of them are substantive. So you can kind of push those out.
But how do you sift through if you’re the Department of Labor that has limited resources, they need to get a rule done. I know the executive branch wants to move as quick as possible. We know that just from other things that are going on.
What are kind of the next steps in terms of timing and maybe ultimately an effective date to a final rule?
Andrew G.I. Kilberg, Gibson Dunn
Yeah, this is my favorite topic to talk about as kind of an ad law nerd and as someone who at DOL, one of my responsibilities was managing some of our most significant rulemakings, including a couple EBSA rulemakings, the agency within DOL that is in charge of administering ERISA. So this inside baseball is very exciting to me, maybe not others. So they do review the comments in detail.
You’re right that I don’t know that there’s going to be a single person that reads every single one of the 40,000 plus, but they’re well-practiced at identifying what are the significant comments. And that’s an important thing that they legally have to do. Under the Administrative Procedure Act, as it’s been interpreted by federal courts, the department must consider and must respond in the release that supports a final rule, must respond to significant points that are made by the public.
So what they’re doing now, and I’m sure they got started immediately, maybe with a break for Independence Day, is they started reviewing them. Now, timing, it can be very difficult to know. It’s a closed universe.
The department’s going to keep that closely held as much as they can. But there is a hint that recently came out around a week ago. I think it was July 3rd.
The administration as a whole, the Office of Management and Budget within the White House issued what’s called a regulatory agenda. And this one covers all of 2026. And in there, the entry for this rulemaking, it said that they estimated August for analyzing comments.
My interpretation of that is that they’re targeting getting this kind of first step of really digesting the comments, understanding what they need to respond to, and really what their responses are likely to be by sometime in August. And that’s probably when they’ll really put pen to paper on not only what the final regulatory text would say, but just as importantly, I think, is the explanation, the preamble to that rule and the economic analysis that they have to provide about the costs and benefits to support the final rule. I’m sorry.
Go ahead. Finish your thought. I apologize.
You asked about the effective date when it’s going to be published. On that timeline, and the department can move fast if they want to, and this is, I think, a pretty high priority rulemaking for them. It’s entirely possible we’ll see a final rule by the end of the year or early 2027.
A lot of that will depend on the interagency review process. They’ll have to go to the White House, be reviewed by SEC, Treasury, in all likelihood. But we could see a final rule by the end of 2026, early 2027.
And the effective date, I best guess would be 60 days after that. We’ll see what they determine on that. But this is not the type of thing that’s really requiring anything new.
It’s providing guidance and a safe harbor if planned fiduciaries would like to access it. So, it’s not requiring anything. It’s not a new regulatory standard that someone has to follow.
Otherwise, they’ll be penalized in some way. So, that kind of 60-day deadline seems right to me. It gives people time to absorb it, understand it, and they can start following it as early as then.
Jeffrey Snyder, Broadcast Retirement Network
I apologize for interrupting. That wasn’t my intent. Just as kind of a last question, obviously, this is kind of, as you said, a high-profile rule.
It gets picked up in the popular press. I would say I’m not going to speak for you, but when I read articles, both in trade and also in what I’m going to call the mainstream press, they kind of position it in a certain way. This is kind of a stupid question, but do people in the Department of Labor read those articles?
Do they process that? Obviously, it’s on an individual basis. But speaking from experience, does that shape at all the policy, or does that really come back to the comments that are received?
I’m just curious, based on your own experience.
Andrew G.I. Kilberg, Gibson Dunn
I think that the focus primarily is going to be on the comments received. That’s the administrative record, and that’s where people are really putting forward the serious comments. Talk mostly about supportive, but also opposed.
They’re going to look at those and consider. There were some comments that said this is not a correct interpretation of ERISA, or that we’re attacking this as a rule that’s just trying to get private assets into 401ks, which I think is over-reading it entirely and misunderstanding how the products, some of which I think approaches are already being taken by some plans and products that are going to come online in the near future. I can say a word or two about that.
In terms of the press, I’m sure they’re aware of it. I don’t know that there’s anyone who’s reading all of it, but ultimately it’s not what matters in terms of finalizing the rule and the substance itself. I can’t say that politics and noise in town or across the country doesn’t affect how people approach things.
I’m sure it has some effect, but really it’s the comments. On that, I think that what’s the final rule going to look like? Well, I’m not there.
I can’t predict with any kind of 100% certainty, but I do think that on negative comments, there’s a lot of misunderstanding about what the rule is and what it does. Firstly, it is an asset-neutral rule. It’s not targeted just at alternative assets, private market funds, anything like that.
Of course, that’s, I think, part of the impetus here to provide some guidance. There’s the Intel case at the Supreme Court that the Supreme Court will hear in October or November, probably issue a decision sometime in 2027. It’s a current topic, but the rule is much more broader than that.
It covers any type of investment option and really trying to go back to fundamental principles of prudence as a process. It’s not about Monday morning quarterbacking the decisions that fiduciaries make, sometimes many years later. With respect to alternative assets in particular, there’s this kind of, I think, storyline or narrative out there that everyone’s going to be thrown into these highly risky funds that they can’t get their money out of.
That’s just not true. What the industry is talking about offering, and planned sponsors would have the option to offer as an option to participants, to workers, so no one would be forced to accept anything, is target date funds that include as one component private market funds or exposure to private market funds and private market assets. To offer a well-rounded, well-diversified exposure to the market as a whole, because we’ve seen over the last 25, 30 years, is that the private markets are a significant aspect of our economy.
If you’re missing that, you’re missing a lot. You’re missing a lot of benefits, not only from the diversification, but also from just, frankly, superior performance and risk mitigation for down cycles and up cycles alike. The last thing I’ll say is that the supportive comments also, they picked out suggestions, things that they thought could improve the rule, some consistent themes across that, focusing on liquidity, valuation, some of these nitty-gritty factors, and particularly the examples the department gave, to just help the department ensure that they’re not inadvertently favoring or disfavoring certain types of products. Liquidity is a great example. A lot of commenters said the department should not effectively incorporate SEC rules that are specifically applicable to open-end mutual funds, because that could be interpreted as disfavoring collective investment trusts, which, as I’m sure many of your viewers know, a significant portion of 401k target date funds and other funds are already structured as CIT, so it doesn’t really make any sense to focus solely on mutual funds, not to say that mutual funds should be disfavored either. That’s just one example, and giving suggestions how the department can keep moving in this important regulatory direction of providing greater guidance and greater certainty by modernizing a privileged transaction exemption called 77-4 that is specific to mutual funds.
But if they broaden that to include other investment types, it would provide a lot of benefits, not just to the industry, but ultimately to workers who are invested in 401ks.
Jeffrey Snyder, Broadcast Retirement Network
Well, Andrew, I could talk to you for hours, I guess. I have lots of follow-up questions. But look, that’s just good impetus to bring you back on the program.
Thanks so much for joining us, and we look forward to having you back again very soon, sir.
Andrew G.I. Kilberg, Gibson Dunn
Thanks for having me. I’ll have to have more coffee if we’re going to talk more about this, though. I think it’s a great topic.
