401(k) Savers Deserve Better Than Washington’s Ping-Pong

Lisa Gomez

Washington is once again playing ping-pong with retirement policy. The Department of Labor’s latest proposal on how fiduciaries select investment options has already been volleyed into familiar corners—praised or condemned depending on the narrator, reduced to a referendum on private markets.

Such framing misses the point. Having spent years working in and alongside the regulatory framework that governs these decisions, I can say with confidence: This rule is not about any one investment. It is about whether we are serious about how fiduciaries make decisions and whether we are willing to give them guidance that actually works.

The debate has followed a predictable pattern: sweeping endorsements on one side, wholesale rejection on the other. Each reaction keeps the conversation going, but neither moves it forward.

Layered on top are political slogans and doomsday warnings that may resonate inside the Beltway but mean little to the people this system is meant to serve. Plan fiduciaries and participants do not need talking points or alarmism. They need clarity.

The word-slinging in Washington does not help the American worker trying to save consistently, make thoughtful choices and build a secure retirement for themselves and their families. Nor does it help the fiduciaries tasked with guiding those decisions in a system that too often shifts direction before long-term strategies can take hold.

At its core, the DOL’s proposal is about process. That is exactly where the focus should be. But “process” has too often been reduced to something it is not—a compliance exercise, a checklist, a set of pretty binders built in anticipation of litigation.

A prudent process is none of those things.

It is a disciplined approach to decisionmaking. It requires fiduciaries to understand risk in real terms, not just in disclosures. It requires evaluating fees, liquidity and complexity in the context of the participants they actually serve. It requires ongoing oversight, not one-time selection. And it requires documentation, but as evidence of thoughtful judgment, not a substitute for it.

The DOL proposal reinforces many of these principles. That is a strength.

But it is not complete. Some expectations will be difficult to operationalize, particularly for smaller plans. Certain provisions risk encouraging defensiveness in place of sound decisionmaking. Without careful calibration, guidance can harden into standards that are easier to enforce than they are to implement.

This is where the current debate is falling short.

We should not be applauding the proposal as if it is finished. Nor should we be rejecting it outright because it is imperfect. Both are knee-jerk reactions that avoid the harder work: engaging with the substance and improving it.

That work should start with practical questions. What would make this framework more usable for fiduciaries? Where do they need clearer guardrails—and where do they need flexibility? How can the rule better reflect the realities of plan governance across different plan sizes and structures? And where should it go further to protect participants from conflicts, excessive complexity or opaque decisionmaking?

The proposal should also recognize that helping fiduciaries make better decisions is not incompatible with protecting participants; it is one of the most effective ways to do so. A framework that is clear, workable and grounded in how decisions are actually made is more likely to produce better outcomes than one that is overly rigid or reactive.

Yes, there are bad actors in this space. Protecting participants from self-dealing, excessive fees and conflicted advice must remain a priority. But most fiduciaries are trying to do the right thing. They need guidance that supports that effort—not a system that assumes the worst and leaves the best without a clear path.

We should also be clear about another reality: Even the most rigorous fiduciary process cannot guarantee outcomes. Markets fluctuate. Investments perform differently than expected. Participants make different choices.

That is not a failure of the system. It is the nature of investing.

What the system can do is ensure that decisions are made with care, loyalty and discipline. It can recognize something the proposal itself begins to acknowledge: Participants benefit from access to broader, holistic advice, and they should not be effectively steered away from it.

That matters. Participants are not just selecting investments—they are making financial decisions in the context of their broader lives. Expanding access to guidance that is transparent, aligned with their interests, and not driven by product incentives is a practical complement to stronger fiduciary processes, not a substitute for them.

Employers and plan providers are not positioned to offer personalized, conflict-free guidance. Investor advocates such as Pam Krueger, an adviser and broadcaster, have emphasized that the real differentiator of participant success is not access to additional investment options, but a trusted way for individuals to evaluate their options with a fiduciary who is legally obligated to act in their best interest, without conflicts.

Having worked closely with plan fiduciaries across a wide range of structures, one point is consistently clear: Most are not looking for shortcuts. They are looking for clarity. They want to understand what is expected of them and how to meet that standard in a way that serves their participants well.

The Department of Labor’s Employee Benefits Security Administration has a critical role to play in providing that clarity. Its mission—to protect the job-based retirement and health benefits of America’s workers—is not in question.

But fulfilling that mission requires more than another round of back-and-forth. It requires a framework fiduciaries can actually use—one grounded in how decisions are made in practice, not just how they are described in theory.

Defined contribution savers deserve better than a system that keeps bouncing between extremes.

They deserve a system grounded in discipline, clarity and practical guidance—and a willingness from all sides to build it.

Lisa M. Gomez is the president and founder of LMG Collaborative Consulting Solutions and a former assistant secretary of labor who led the Employee Benefits Security Administration.

This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of ISS STOXX or its affiliates.