Over the first half of 2026, four major policy developments relating to benefits and executive compensation occurred. These policy changes involved the U.S. Department of Labor (DOL) and the U.S. Securities and Exchange Commission (SEC).
DOL’S EBSA Proposes Safe Harbor Rule for 401(k) Plans
The DOL’s Employee Benefits Security Administration (EBSA) proposed a rule that would establish a safe harbor for fiduciaries under the Employee Retirement Income Security Act (ERISA) when selecting investment funds for 401(k) plans. The safe harbor rule would give fiduciaries protection against allegations of a breach of the fiduciary duty of prudence under ERISA related to choosing and maintaining certain investments.
Under the proposed rule, fiduciaries must focus on six factors when determining whether to select an investment, including performance, fees, liquidity, valuation, performance benchmark, and complexity. The proposed rule attracted more than 47,000 comments, such as criticism from some that the rule creates a so-called “presumption of prudence” and that the six-factor scheme is rigid.
EBSA Issues Guidance on Enforcement Priorities
EBSA has issued a field assistance bulletin and certain public remarks that outline shifts in the agency’s enforcement policy. Attorneys have reported fewer interactions with DOL’s enforcement staff overall, and the actions occurring focus on issues affecting participants.
SEC Proposes Streamlining Disclosure Rules
The SEC recently proposed changes to disclosure rules that would likely cause many companies to provide regulators with fewer details on executive compensation. If the SEC finalizes the rule, the new framework will base the required disclosures on the company’s size. What remains unclear is whether the reduced disclosure requirements would also reduce investor scrutiny of a company’s executive compensation practices.
EBSA Advises Trump Accounts Not Subject to ERISA
EBSA also issued a June technical release advising that Title I of ERISA generally is inapplicable to children’s Trump accounts. Title I focuses on duties of reporting, disclosure, participation, vesting, fiduciary standards, and criminal and civil enforcement. Much of the guidance closely mirrored similar guidance on health savings accounts (HSAs), which states that HSAs do not qualify as ERISA plans. Still, a former EBSA chief considers the guidance to be a “significant departure” from EBSA’s past practices.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
