DOL Lays Out Regulatory Priorities

The U.S. Department of Labor unveiled its semiannual regulatory agenda on Thursday, indicating that policies on employee benefits, including pharmacy benefits and employee stock ownership plans, are among the nearly 150 proposals intended to improve efficiency, promote transparency and balance the needs of workers and employers.

Secretary of Labor Lori Chavez-DeRemer said the administration’s approach is aimed at ensuring “every hardworking family has a fair shot at achieving the American Dream.” She added that “eliminating red tape and crafting smart regulations that spur job creation will bring us even closer to reaching the Golden Age of the American Worker.”

In July, the DOL announced 63 regulatory actions, which prompted one of its agencies, the Employee Benefits Security Administration, to remove several bulletins deemed “obsolete” or unnecessary. The DOL also announced an updated rule on annuity safe harbors, only to reverse that decision after facing swift industry opposition. 

Key proposals under review

President Donald Trump’s agenda for the DOL spans a wide range of issues, some of which revisit policies enacted under former President Joe Biden.

Among the highlights are new proposals such as the “Improving Transparency into Pharmacy Benefit Manager Fee Disclosure” proposal. The department will explore ways to require more transparency in how PBMs are compensated under employer-sponsored health plans, in line with an April executive order on lowering drug prices.

The agency will also consider “Default Electronic Disclosures by Employee Welfare Benefit Plans Under ERISA,” which aims to reduce costs by establishing safe harbors for providing participants information electronically.

The agenda also includes, among its proposed rules, the “Worker Ownership, Readiness, and Knowledge–Proposed Regulation Relating to the Definition of Adequate Consideration,” likely to be EBSA’s proposal to govern the appraisal of employee stock ownership plans. The Senate Committee on Health, Education, Labor and Pensions recently advanced two ESOP bills unanimously.

Regulators are also weighing how much consideration fiduciaries may give environmental, social and governance factors when selecting investments. In May, the DOL announced it would craft a new ESG rule, one likely to resemble guidance from Trump’s first term directing fiduciaries to only consider “pecuniary factors” when making investment decisions. The soon-to-be reversed Biden-era ESG rule advised fiduciaries to use ESG considerations as a “tiebreaker” if two investment options offered the same rate of return.

Also listed in the final stage of the regulatory process is the “Investment Advice Fiduciary Under ERISA,” indicating that, like the ESG rule, the Biden-era Retirement Security Rule will soon be replaced.

Other items on the agenda include reporting and disclosures required by the SECURE 2.0 Act of 2022, guidance on pooled employer plans, and review of Interpretive Bulletin 95-1 as it relates to pension risk transfers.