A Plan Sponsor's Guide to the 2026 Retirement Regulatory Landscape
A mid-year snapshot of what's proposed, what's finalized and what every plan sponsor needs to act on now.
Key Takeaways
Three regulatory developments — alternative investments, ESG and SECURE 2.0 — are advancing at once, with some rules finalized, proposed or in court.
Regardless of these regulatory outcomes, maintaining a documented, objective fiduciary process may help plan sponsors navigate uncertainty.
By year-end 2026, many plans will need updated documentation reflecting SECURE 1.0, SECURE 2.0 and CARES Act provisions.
Halfway through 2026, several major developments have set up an active regulatory environment for workplace retirement plans. While the Trump administration has sought to provide clarity for plan sponsors and advisors — particularly for alternative investments and environmental, social and governance (ESG) investing — court cases, divided public and political reaction, and delayed timelines can create regulatory uncertainty.
The impact could affect more than 90 million Americans participating in employer-sponsored defined contribution (DC) plans. These accounts held roughly $14.2 trillion in combined assets as of 2025.1
Three key areas of interest include:
Alternative investments and the fiduciary rule
ESG investing
SECURE 2.0
Proposed Fiduciary Rule on Designated Investment Alternatives
In August 2025, President Donald Trump signed an executive order directing the Department of Labor (DOL) to revisit its rules governing how fiduciaries can include alternative assets in 401(k) plans. These assets include private equity, real estate, commodities, infrastructure, and cryptocurrency, as well as other digital assets.
The rule: On March 31, 2026, the DOL issued a proposed rule titled “Fiduciary Duties in Selecting Designated Investment Alternatives.” This rule aims to clarify how fiduciaries can meet their duty of prudence when selecting alternative investment options.2 Some ERISA attorneys have described it as the most significant new formal guidance for retirement plan fiduciaries in 47 years.3
The central feature of the proposed rule is a regulatory safe harbor comprising a six-factor test that fiduciaries can use when selecting investments.4 The factors include performance, fees, liquidity, valuation, benchmarking and complexity. Under this framework, fiduciaries that conduct a documented, objective evaluation of an investment based on these six factors are deemed to have satisfied their duty of prudence under ERISA. This process aims to help protect against ERISA litigation, which has been a significant barrier for plan sponsors when offering alternative investments.
The response: The comment period drew nearly 45,000 responses, with opinions sharply divided.5
Supporters (including Vanguard, Aon and the Investment Company Institute) argue that the safe harbor would give plan sponsors the confidence to include alternative investments without undue litigation risk.
Opponents (including Morningstar and Democratic lawmakers) argue that the rule doesn't do enough to protect retirement savers and that it lowers the fiduciary standard.6
Where things stand: The DOL is reviewing comments before publishing a final rule, with some suggesting late 2026 as a possible timeline. However, the overall volume and varied viewpoints in the responses may indicate revisions and a potential delay.7
What this means for plan sponsors: The proposed rule provides directional clarity on how the Trump administration intends to proceed.
Cryptocurrency in 401(k)s: The Complexity and Valuation Factors
Cryptocurrency and other digital assets are in the scope of the proposed “Fiduciary Duties in Selecting Designated Investment Alternatives” rule, but weren’t explicitly called out in how they should be treated. Based on the current proposal, they will be subject to the six-factor safe harbor. Two factors carry particular weight for cryptocurrency.8
Complexity: A fiduciary must have sufficient skills and knowledge to evaluate the investment. This is relevant to cryptocurrency because its technological infrastructure, custody arrangements and market mechanics are more complex than those of traditional assets in workplace retirement plans.
Valuation: The investment must be timely and accurately valued. Securities that aren’t publicly traded must be valued through a conflict-free, independent process at least quarterly. Cryptocurrency valuations have historically raised questions about methodology, price-feed reliability and custodial risk, all of which a fiduciary would need to address through documented analysis.
The bottom line: Even if the safe harbor rule is finalized, adding cryptocurrency to a plan lineup requires a more rigorous evaluation process than adding a private equity sleeve or a real estate fund.
Where things stand: The DOL needs time to review the 45,000 comments submitted in response to the proposed rule. The timing of the final rule hasn’t been confirmed.
What this means for plan sponsors: The proposed rule provides an indication of how plan sponsors may evaluate cryptocurrency as a plan investment and the relevant factors to consider as part of their fiduciary process.
The Fiduciary Advice Landscape: Settled, for Now
In March 2026, the U.S. District Court for the Eastern District of Texas vacated the Biden-era Retirement Security Rule, ending its framework for determining when investment advice is treated as fiduciary advice under ERISA. As a result, the DOL reverted to the previous five-part test for determining fiduciary status.9
Where things stand: The DOL said there are "no current plans to engage in notice and comment rulemaking" on this topic, reversing the earlier expectation of a replacement rule.
What this means for plan sponsors: The five-part test governs, and the DOL has no announced plans to revisit fiduciary advice rulemaking during this administration. This area of the 2026 regulatory landscape is the most settled.
ESG Investing: New Rule in Motion and New Legal Risks
A rule in transition defines the ESG regulatory picture in mid-2026. The prior Biden-era ESG rule is gone, and its replacement is moving forward.
New ESG rule: In May 2025, the DOL dropped its defense of the 2022 ESG rule, which had permitted fiduciaries to use ESG factors as a tiebreaker between otherwise equal investment options. On June 30, 2026, the agency submitted the replacement ESG rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” to the White House for review, a required step before publication for public comment.10
The new ESG rule is likely to reaffirm the standard set during Trump's first term, which mandates fiduciaries to focus solely on financial considerations in investment decisions and prohibits them from factoring in non-financial elements. Although the public comment period hasn’t yet started, the process is moving forward.
New Legal Risk: Guidance on Proxy Advisors and Anti-ESG State Laws
In addition to the ESG rule, the DOL issued guidance on April 14, 2026, that highlighted two specific points:11
Proxy advisors may now be considered ERISA fiduciaries. Previously, proxy advisory firms, which make recommendations on shareholder votes on behalf of institutional investors, generally operated as information providers rather than fiduciaries. The new guidance indicates that if a plan has a contract with a proxy advisory firm for investment advice services, that firm may meet ERISA's five-part test for fiduciary status. This has significant implications for plans that have granted discretionary voting authority to firms like ISS or Glass Lewis.
Anti-ESG state laws may now apply to ERISA plans. ERISA typically preempts state laws governing employee benefit plans, a provision that has historically shielded plan sponsors from state-level ESG restrictions. The new guidance indicates that state laws governing ESG investments wouldn’t be preempted by ERISA, giving states that have enacted anti-ESG legislation a potential legal hook into federally governed plans.
Where things stand: As the new rule advances, plans face an ESG regulatory gap. A House bill banning ESG investments in DC plans passed in January 2026, with companion Senate legislation still pending in committee.12
What this means for plan sponsors: The proposal could affect plans that incorporated ESG options under prior guidance, including with respect to investment menus and investment policy statements. It may also have implications for arrangements involving proxy advisors with discretionary voting authority and the circumstances under which an ERISA fiduciary relationship may arise.
SECURE 2.0: The Compliance Clock Is Ticking
SECURE 2.0 is now in its fourth year of rolling implementation. The first half of 2026 saw six provisions go online simultaneously, making it the most operationally intensive compliance period since the law was enacted. The second half is defined by one hard deadline that no plan sponsor can miss.
What Took Effect in the First Half of 2026
What's Coming in the Second Half of 2026
Documentation and Process Provide Pathway for Plan Sponsors
The retirement regulatory landscape in mid-2026 is defined by a push to expand alternative investment options with new proposed fiduciary rules, a pullback to a financial-factors-only standard for ESG investments, and a series of SECURE 2.0 compliance requirements arriving on a fixed timeline. Continued uncertainty stems from a U.S. Supreme Court case that could reshape ERISA litigation and from divided public reaction to the fiduciary rules on alternative investments and to ESG rulemaking, which is now moving forward.
For plan sponsors and advisors, the common theme is documentation and process. The DOL's proposed safe harbor rewards fiduciaries that can demonstrate systematic, objective and well-documented decision-making. The plan amendment deadline makes December 31 the moment when operational compliance and formal documentation must finally align.
How Do Government Policies Affect the Market?
Get insights about the intersection of U.S. government policies and the financial markets from our investment professionals.
Related Insights
Edward Rueda, “ICI: U.S. Retirement Assets Reached $49.1T in 2025,” PLANSPONSOR, March 27, 2026.
Congressional Research Service, “Department of Labor’s Proposed Regulation on Fiduciary Duties in Selecting Designated Investment Alternatives,” In Focus, May 15, 2026.
McAfee & Taft, “Most Significant New Guidance for Retirement Plan Fiduciaries in 47 Years,”Webinar with Brandon P. Long, April 16, 2026.
Brian M. Pinheiro and Rachel A. Loscheider, “DOL Proposes Rule on Fiduciary Duties in Selecting 401(k) Plan Investments,” Ballard Spahr, April 14, 2026.
James Van Bramer, “Industry Divided: DOL’s 401(k) Investment Selection Rule Draws Thousands of Comments,” PLANSPONSOR, June 5, 2026.
Courtney Degen, “Groups Raise Concerns, Seek More Time on DOL’s 401(k) Alternatives Proposal,” Pensions & Investments, April 28, 2026.
James Van Bramer, “Reading 45,000 Comments on DOL 401(k) Investment Selection Rule,” PLANADVISER, June 10, 2026.
Brian M. Pinheiro and Rachel A. Loscheider, “DOL Proposes Rule on Fiduciary Duties in Selecting 401(k) Plan Investments,” Ballard Spahr, April 14, 2026.
James Van Bramer, “DOL Returns to Previous Guidance on Fiduciary Status,” PLANSPONSOR, March 19, 2026.
James Van Bramer, “DOL’s Replacement ESG Rule Reaches White House,” PLANSPONSOR, July 2, 2026.
Karen N. Brandon and Carly E. Grey, “New DOL Guidance Raises Legal Risk of ESG Investments,” Ogletree Deakins, April 17, 2026.
James Van Bramer, “House Passes Bill to Restrict ESG Investment in DC Plans,” PLANSPONSOR, January 15, 2026.
Emily Boyle, “SECURE 2.0 Roth Deadline Tops Year-End Action Item List,” PLANSPONSOR, October 20, 2025.
Kimberly Lankford, “SECURE 2.0: What’s Effective This Year and What Plan Sponsors Need for 2026,” PLANSPONSOR, February 3, 2025.
Kimberly Lankford, “SECURE 2.0: What’s Effective This Year and What Plan Sponsors Need for 2026,” PLANSPONSOR, February 3, 2025.
PLANSPONSOR Staff, “What Does the Proposed New Rule on Paper Statements Require?” PLANSPONSOR, May 19, 2026.
Kimberly Lankford, “SECURE 2.0: What’s Effective This Year and What Plan Sponsors Need for 2026,” PLANSPONSOR, February 3, 2025.
Emily Boyle, “IRS Issues Guidance on Qualified Long-Term-Care Distributions,” PLANSPONSOR, May 21, 2026.
Emily Boyle, “SECURE 2.0 Roth Deadline Tops Year-End Action Item List,” PLANSPONSOR, October 20, 2025.
Alex Ortolani, “Biden Administration Stresses SECURE 2.0 and Financial Inclusion,” PLANSPONSOR, October 29, 2024.
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