Comment Deadline is Today on DOL’s Proposed Investment Rule

Employee Benefits Security Administration Head Daniel Aronowitz is scheduled to speak June 1, at the PLANSPONSOR National Conference in Nashville, about a range of topics, including the Department of Labor’s proposed rule for prudence when selecting designated investment alternatives for a defined contribution plan menu.

The comment deadline on the proposal is 11:59 pm EDT, June 1.

Aronowitz has said the proposal is built to encourage innovation in retirement investing and to withstand legal challenges.

Among the nearly 40,000 comments through May 29, were hundreds, if not thousands, of identical messages from individuals both supporting and decrying the proposal as either a great opportunity for retirement plan investors, or a great danger to them. At least one comment was filed by someone—not President Donald Trump– who listed his address as 1600 Pennsylvania Ave., Washington, D.C.

The proposal, offered by EBSA after Trump last year issued an executive order calling for “democratizing access to alternative assets” in retirement plans, offers a framework for fiduciary evaluation of all retirement plan investments and a process for making investment decisions.

The proposal offers a safe harbor that could protect plan fiduciaries from litigation related to their duty of prudence under the Employee Retirement Income Security Act when selecting investments. It would be available to plan fiduciaries that follow “a prudent process.” It instructs fiduciaries to use a six-factor test when selecting investments for their plans: performance, fees, liquidity, valuation, benchmarking and complexity.

In remarks he made in early May, Aronowitz said the proposal is designed to create a process-driven framework and legal durability under administrative law after the Supreme Court’s 2024 Loper Bright Enterprises v. Raimondo decision that overturned Chevron deference. He also stated a broader goal of unlocking flexibility for plan sponsors while protecting retirement savers.

A review of comments filed as of Friday found a state representative from West Virginia in favor of the proposal.

Jarred Cannon, chair of committee on investments and the interim committee on pensions and retirement, a Republican in the West Virginia House of Delegates, wrote that “the proposal reflects an important and practical step toward aligning defined contribution plans with how modern portfolios are constructed.”

Cannon framed his support for the proposal around fairness for workers in his state.

“For West Virginia, expanding access to these types of investment opportunities is about fairness and competitiveness. Public-sector employees already benefit from diversified portfolios that include private markets. Private-sector workers should have access to similar tools as part of their retirement planning,” he wrote.

Eric Droblyen, CEO and owner of Employee Fiduciary, a low-cost 401(k) provider to more than 5,000 small businesses, wrote that he supports the rule’s core objective of providing a clear framework for prudence when selecting investments. But he also asked the DOL to strengthen aspects of the proposal in order to provide better “access, disclosure, and transparency standards to meaningfully protect employees.”

Specifically, he wrote, “In its current form, the rule’s safe harbor rests on a broken fee disclosure framework for collective investment trusts holding private market assets, extends asset-neutral treatment to cryptocurrency without any participant protections, and creates robust legal protections for fiduciaries without corresponding transparency for participants.”

The DOL is expected to review all the feedback once the comment period closes and could finalize the proposal by the end of 2026, sources have said.