Trump administration proposes 401(k) rule changes, critics warn of risk
8 reported
According to a ProPublica report, the Trump administration is moving to weaken legal protections for workers’ 401(k) retirement savings by softening the fiduciary standard that holds employers accountable for mishandled funds. The change is designed to give employers cover if workers’ 401(k)s are deflated by expensive, opaque or unproven investments, the report states. The effort is led by Daniel Aronowitz, a former industry insider whose firm helped large companies protect themselves against worker lawsuits, now heading the Department of Labor’s Employee Benefits Security Administration (EBSA). Wall Street firms and large employers are backing the push, seeking a bigger piece of the $10 trillion in 401(k) plans and protection from class-action lawsuits. The proposed rule would create a “safe harbor” legal shield for employers who follow a set process when approving investments, making it harder for workers to sue. Critics, including former EBSA officials, argue this is a “check-the-box approach” that undermines the core of the Employee Retirement Income Security Act of 1974 (ERISA). The report notes that EBSA has also updated enforcement priorities to avoid challenging employer investment choices if proper steps were followed, regardless of outcomes for workers.
What’s reported
The Trump administration is softening the fiduciary duty standard that holds employers accountable for 401(k) mishandling.
Daniel Aronowitz, former head of a firm that helped companies defend against worker lawsuits, now leads EBSA and is driving the rule changes.
The proposed rule would create a “safe harbor” giving employers “significant deference” from courts if they follow a set process for approving investments.
Wall Street firms and large employers support the changes, seeking access to the $10 trillion in 401(k) plans and protection from class-action lawsuits.
Over 90 class-action lawsuits against large employers were filed in 2025, according to the report.
EBSA released a bulletin in April 2026 stating investigators “must avoid cases that unfairly second-guess process-based fiduciary judgments.”
Former EBSA official Ali Khawar called the approach a “check-the-box approach,” and 34-year EBSA veteran Tim Hauser said it undermines ERISA’s core protections.
The Labor Department has filed amicus briefs in class-action lawsuits on the side of defendant companies, including Home Depot, a shift from past practice.
Key figures
Daniel Aronowitz, head of the Employee Benefits Security Administration (EBSA)
Ali Khawar, former senior official at the Department of Labor under President Joe Biden
Tim Hauser, former 34-year veteran of EBSA
Kai Richter, attorney with Cohen Milstein specializing in ERISA class-action cases
President Donald Trump
Sources: propublica.org
