The Regulatory Pendulum Swings Back: Trump's Impact on Workplace Retirement Plans
President Donald Trump’s proposed regulatory changes could have far-reaching effects on retirement plans.
Key Takeaways
New deregulation initiatives may reduce federal government oversight of workplace retirement plans.
Rules governing retirement plans and investments have fluctuated during recent presidential administrations.
Staying informed about proposed regulatory changes is crucial, as plan sponsors may have questions about how these affect workplace retirement plans.
In President Trump’s second term, the focus on regulations for workplace retirement savings is becoming clearer. His initial actions — such as reducing oversight across federal agencies and reevaluating environmental, social and governance (ESG) investing policies — indicate shifts that could transform the retirement landscape.
The One Big Beautiful Bill Act (OBBBA) includes additional provisions that might impact retirement planning.
Advisors and plan sponsors should stay ahead of these changes to help clients adapt their strategies and remain compliant.
Approximately 72% of U.S. private industry workers have access to workplace retirement savings plans or programs.1 By the end of June 2025, about $13 trillion was invested in employer-based defined contribution (DC) retirement plans, with $9.3 trillion in 401(k) plans.2 Regulatory changes to these plans could affect many Americans’ retirement savings.
Regulatory Changes in Workplace Retirement Plans
Rules governing workplace retirement plans have evolved over the past two presidential administrations. While some changes might reduce compliance costs for plan sponsors, others could raise concerns for plan participants.
Trump Administration I | Biden Administration | Trump Administration II | |
|---|---|---|---|
Oversight and Enforcement | The Trump Administration repealed the Obama Administration’s “Fiduciary Rule,” which required advisors to prioritize their clients’ interests above their own. It reverted to the “suitability standard,” a lower level of accountability that only demands recommendations meet a client's specific needs.3 | President Biden reaffirmed fiduciary responsibility for those providing investment advice to retirement plan participants as part of a new “Retirement Security Rule.” It requires providers to adhere to high standards of care and loyalty when recommending investments and “avoid recommendations that favor the investment advice providers’ interests.”4 | Major industry trade groups challenged the Retirement Security Rule in federal court. This litigation continues, and the U.S. Department of Labor (DOL) intends to issue a new rule in 2026. |
ESG Investing | In 2020, Trump adopted a rule that barred retirement plans from considering non-financial factors.5 | Biden replaced the rule with one that allows retirement plans to consider ESG factors when choosing between two or more financially equal investment options.6 | Attorneys general from 26 states challenged the ESG rule in court, arguing that it violates the Employee Retirement Income Security Act of 1974 (ERISA). In May 2025, the DOL filed papers to end its defense of the rule.7 The agency is working on a new ESG rule, which it intends to finalize by mid-2026.8 |
Cryptocurrency | No official policies or regulations were established. | Under Biden, the DOL issued a statement saying cryptocurrency didn’t belong in most employees’ retirement accounts and that the department planned to investigate some plans that offered this option.9 | On August 7, 2025, Trump signed an executive order directing the DOL to reassess guidelines on crypto in ERISA-governed plans. This action opens the door for including crypto in workplace retirement plans.10 Proposed legislation, the Retirement Investment Choice Act, would codify Trump’s executive order. |
Private Investments and Other Alternative Assets | In 2020, Trump directed regulators to evaluate whether retirement plans should include alternative and private assets.11 | On December 21, 2021, the DOL issued a supplemental statement discouraging fiduciaries from considering alternative assets in 401(k) retirement plan investment menus. | Trump’s August 7 executive order also directed the DOL to revisit and possibly change its rules about how fiduciaries can include alternative assets — like private investments, real estate and commodities — in 401(k) plans. On August 12, the DOL rescinded the 2021 supplemental statement. The proposed Retirement Investment Choice Act would reduce barriers to including these asset classes in 401(k) plans. |
What Remains Unchanged in Retirement Regulations?
The SECURE Act 2019, a bipartisan bill passed during Trump’s first presidency, aimed to expand retirement security for Americans by introducing items such as Pooled Employer Plans for small employers, the inclusion of annuities and raising the required minimum distribution (RMD) age to 72.12
Building on this momentum, the SECURE 2.0 Act of 2022, another bipartisan bill passed during Biden’s presidency, implemented additional provisions. These included automatic enrollment and portability, more lenient emergency withdrawal provisions, and increasing the RMD to age 73 (gradually increasing to 75 by 2033).13
The SECURE ACT 2.0 is expected to stay in place under the Trump administration, with ongoing proposed updates such as:
Retirement Plan Access for Independent Workers
Proposed legislation in the Senate would expand access to pooled employment plans and independent retirement accounts to independent workers.14 With 36% of the U.S. workforce classified as independent workers, plan membership could significantly increase.15
In-Plan Retirement Income Product Options
With today’s longer life expectancies and fewer employers offering defined benefit pension plans, plan sponsors can offer additional in-plan retirement income products. These include options such as annuities and hybrid target-date funds. Plus, new artificial intelligence-powered digital tools will support the rollout of such products by providing tailored investment recommendations based on factors such as age, savings rate, and risk tolerance.
What’s the Potential Impact of Retirement Plan Reform?
The legal landscape for workplace retirement plans may undergo significant changes.
Workplace retirement plans have recently faced a growing wave of class-action lawsuits.16 These may lessen with the Trump administration’s proposed litigation reforms to reduce frivolous lawsuits and limit large class actions with excessive damages.17
This may reduce litigation costs for plan sponsors. However, it may also restrict access to settlements for plan participants who can’t sue on their own.
Key Retirement Plan Trends to Monitor
As the regulatory pendulum continues to swing back from the Biden administration, it's important to monitor the shifting status of the Trump administration’s proposed changes and new legislation from Congress.
Regulatory Proposals from the Department of Labor
ESG investing: The DOL plans to publish a new rule to rescind Biden-era guidance that retirement plan fiduciaries consider ESG factors when two investment options offer the same rate of return.18
Cryptocurrency: The DOL has rescinded the Biden administration’s direction that plan fiduciaries exercise “extreme care” before offering cryptocurrency as investment options.19
Private assets: Trump has directed the DOL to reexamine current guidance that prohibits investments in private assets in retirement plans. The move could pave the way for investments in private equity, cryptocurrency and other alternative assets in retirement plans.
Proposed Legislation
Recent bills introduced in the Senate aim to reshape participant investment options and increase participation in workplace retirement savings plans:
The Retirement Investment Choice Act proposes significantly expanding access to alternative assets, including cryptocurrency, private equity and real estate, within 401(k) and other defined-contribution retirement plans.20
The Independent Retirement Fairness Act, the Unlocking Benefits for Independent Workers Act, the Modern Worker Empowerment Act and the Association Health Plans Act comprise a package of Senate bills designed to broaden access to portable workplace benefits — such as retirement savings and health coverage — while clarifying legal standards around how workers are classified.21
The Auto Reenroll Act of 2025 proposes allowing periodic automatic reenrollment for workers who opt out of contributions.22 (Currently, employees who opt out of automatic contributions remain unenrolled unless they opt in.)
The Helping Young Americans Save for Retirement Act would lower the age at which an individual can contribute to a workplace retirement plan from 21 to 18.23
Continue checking our latest Insights for updates on how these and other regulatory and legislative changes may impact workplace retirement savings plans.
Authors
Senior Retirement Strategist
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U.S. Bureau of Labor Statistics, “Employee Benefits in the United States March – 2025,” News Release, September 25, 2025.
Investment Company Institute, “Quarterly Retirement Market Data, Second Quarter 2025,” September 18, 2025.
Katelyn Peters, “Everything You Need to Know About the DOL Fiduciary Rule,” Investopedia, September 30, 2022.
U.S. Department of Labor, “Biden-Harris Administration Announces Rule to Protect Retirement Savers’ Interests by Updating Investment Advice Fiduciary Definition,” News Release, April 23, 2024.
Nate Redmond, “U.S. Judge Rejects Republican-Led Challenge to Biden-Era ESG Investing Rule,” Reuters, February 14, 2025.
Nate Redmond, “U.S. Judge Rejects Republican-Led Challenge to Biden-Era ESG Investing Rule,” Reuters, February 14, 2025.
Joshua Lichtenstein, Sharon Remmer, and Jonathan Reinstein, “Trump DOL Withdraws Biden-Era ESG Rule and Crypto Guidance for ERISA Plans,” Harvard Law School Forum on Corporate Governance, June 19, 2025.
Paul Mulholland, “DOL Issues Agenda; Includes New ESG, Fiduciary Rules,” American Society of Pension Professionals & Actuaries, September 4, 2025.
Tara Siegel Bernard, “The Labor Department Wants to Investigate Crypto in Retirement Plans,” New York Times, March 10, 2022.
Kathryn Mayer, “Trump Executive Order Paves Way for Crypto in 401(k)s,” SHRM, August 12, 2025.
Ben Weiss, “Trump to Sign Executive Order to Allow Crypto and Other Private Assets into 401(k)s,” Fortune, August 7, 2025.
IRS, “Retirement Plan and IRA Required Minimum Distributions FAQs,” last updated August 26, 2025.
Doug Sabella, “What Is SECURE Act 2.0: 10 Changes Your HR Team Needs to Know,” Payroll Integrations, April 11, 2025.
SHRM, “Senate Republicans Unveil Legislation to Expand Portable Benefits for Independent Workers,” accessed October 20, 2025.
Andre Dua, Kwelin Ellingrud, and Bryan Hancock, et al., Freelance, Side Hustles, and Gigs: Many More Americans Have Become Independent Workers,” McKinsey & Co., August 23, 2022.
Elijah Nicholson-Messmer, “A Wave of ERISA Lawsuits Could Alter Workplace Retirement Plans,” Yahoo Finance, April 29, 2025.
White House, “President Donald J. Trump Ensures the Enforcement of Federal Rule of Civil Procedure 65(c),” Fact Sheet, March 6, 2025.
James Van Bramer, “DOL to Craft New ESG Retirement Investing Rule,” Plan Sponsor, May 29, 2025.
James Van Bramer, “DOL Resets Stance to ‘Neutral’ on Crypto Options in 401(k) Plans,” Plan Sponsor, May 28, 2025.
Tracey Longo, “New Bill Would Enact Trump's 401(k) Alternative Push into Law, Financial Advisor, October 20, 2025.
James Van Bramer, “Senators Unveil Bills Aimed at Boosting Retirement Security for Gig Workers,” Plan Sponsor, July 9, 2025.
James Van Bramer, “Senators Introduce Legislation to Increase Retirement Savings Participation,” Plan Sponsor, May 21, 2025.
James Van Bramer, “Senate Bill Would Offer Younger Americans More Access to Retirement Plans,” Plan Sponsor, May 12, 2025.
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