The Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor is opting to abandon its appeal of the legal challenges to the so-called fiduciary rule. After insurance industry groups filed immediate legal challenges to the 2024 fiduciary rule proposed by the DOL under the Biden administration, two federal district courts issued stays preventing the rule from taking effect. The cases were consolidated in an appeal by DOL to the U.S. Court of Appeals for the Fifth Circuit.
DOL has requested repeated extensions in the progress of the pending appeal in 2025. Most recently, DOL filed a motion to dismiss its appeal of both cases.
According to its regulatory flexibility agenda, EBSA intends to issue a new fiduciary rule in May 2026. The Senate confirmed Daniel Aronowitz to head EBSA in mid-September. Some anticipate that the new fiduciary rule will contain advice about rollovers.
In response, Lisa Gomez, former head of EBSA, indicated disappointment, but no surprise, about DOL abandoning the appeal. Gomez also expressed concern about a lack of support for individual investors amidst increasingly numerous and complex choices for investments in retirement plans. The former EBSA head also acknowledged the need to resolve the issues raised in the fiduciary rule, as legal challenges have continued the current uncertainty.
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