DOL Poised to Move Faster than Congress on Retirement Reform
•February 9, 2026
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Why It Matters
Regulatory changes will reshape retirement plan offerings and fiduciary responsibilities, directly affecting millions of savers and the financial‑services industry. With Congress unlikely to act, DOL’s rulemaking becomes the primary driver of market evolution.
Key Takeaways
- •DOL to propose alternative‑investment rule by early February.
- •Final rule could be effective 2027, reshaping 401(k) options.
- •Congressional gridlock limits new retirement legislation before midterms.
- •Invest Act may expand accredited investor definition for 403(b)s.
- •DOL files amicus briefs to curb meritless ERISA lawsuits.
Pulse Analysis
The Department of Labor’s upcoming rule on alternative investments marks a rare instance of executive‑branch momentum in a policy arena traditionally dominated by Congress. Prompted by a 2023 executive order, the DOL has adhered to a 100‑day timeline, positioning the proposal for a February release. By targeting collective investment trusts and other non‑traditional assets, the rule aims to broaden diversification options for 401(k) participants, potentially lowering costs and enhancing returns. Its projected 2027 implementation aligns with the industry’s shift toward more sophisticated portfolio strategies, compelling plan sponsors to reassess fiduciary frameworks and compliance processes.
For plan sponsors and advisors, the regulatory shift carries both opportunity and risk. Access to alternative assets can attract younger, tech‑savvy savers seeking higher yields, but it also introduces heightened due‑diligence requirements and volatility concerns. Firms will need to upgrade investment‑selection platforms, integrate robust risk‑management tools, and educate participants on the trade‑offs of non‑traditional holdings. Moreover, the DOL’s parallel effort to challenge frivolous ERISA lawsuits signals a broader intent to protect plan sponsors from costly litigation, reinforcing the importance of sound governance and transparent fee structures.
Against this backdrop, legislative inertia underscores the DOL’s growing influence. The Invest Act’s modest proposals—expanding accredited‑investor criteria for 403(b) plans and creating an SEC task force on senior fraud—represent the only viable congressional action before the midterms. Simultaneously, the Senate’s preoccupation with cryptocurrency legislation diverts attention from retirement reform, further cementing the regulatory route as the primary catalyst for change. Stakeholders should monitor the DOL’s comment period and prepare for rapid adoption, as the next few months will likely define the retirement landscape for the coming decade.
DOL poised to move faster than Congress on retirement reform
Gridlock and political tensions in Washington make passage of substantial retirement legislation unlikely ahead of the midterm elections, but regulatory action could come out of the Department of Labor on a number of key issues.
These include the expansion of access to alternative investments within retirement plans and moves by the DOL to potentially help stay the glut of what many see as deceptive lawsuits targeting retirement plan sponsors for alleged violations of the Employee Retirement Income Security Act.
That, at least, is the assessment of a panel convened for T. Rowe Price’s annual retirement outlook recently. The experts also discussed the rise of artificial intelligence tools in retirement planning and the growing desire of savers across the wealth spectrum to access personalized advice.
Among the speakers was Aliya Robinson, director of congressional affairs, who offered a detailed overview of the retirement policy changes that advisors and their clients should watch out for this year.
See also: 6 trends shaping the future of retirement plans
Legislation takes a back seat for retirement
Such ambitious reform packages as the original Secure Act and its follow-up, the Secure 2.0 Act, Robinson noted, effectively sailed through successive Congresses that had significant challenges setting budgets and even keeping the federal government open. While that has led to speculation among Washington watchers that conditions could be ripe in 2026 for a Secure 3.0 Act, Robinson doesn’t think that is very likely.
“There are two major obstacles to something like that happening—time and a very heated political situation,” Robinson said, citing global and national political tensions that have been dominating the headlines. “If you had asked me a month ago whether a new shutdown was possible, I would have said no, but political events in the last few weeks have changed that calculus significantly.”
Another shutdown would jeopardize progress on any retirement-focused legislation, she said.
“With midterms coming up, I would estimate we have six weeks of potential policymaking time before things kind of lock down,” Robinson observed. “Even without a shutdown, the timing is tight this year.”
Smaller action is possible
The Invest Act, passed by the House of Representatives in mid-December, is a package of more than 20 bills to expand the accredited investor definition and provide access to collective investment trusts for 403(b) plans, Robinson explained. It would also create a task force at the Securities and Exchange Commission to focus on senior investor fraud.
“My sense is that there’s a chance that the Senate could act on this before the midterms shut everything down,” she said. “There’s a chance of it happening, but it’s not necessarily likely. Another outcome is that the Senate, which is working towards their own broad financial services package, could pass rival legislation, which would trigger a negotiation process that would likely put this beyond the midterms.”
Crypto action is not likely
The Senate Financial Services Committee, Robinson said, is much more focused on cryptocurrency than retirement.
“They were expected to pass legislation on this last year, but that discussion has moved into this year and continued to take up a lot of oxygen in the room,” she said. “My assessment is that this focus on crypto further restricts time and resources for any big retirement-related action.”
Regulatory front looks more promising
While congressional action on retirement topics may be unlikely, Robinson said, Labor seems poised for a productive year.
“That will most likely start with proposed regulations on the expansion of access to alternative investments for 401(k) plan investors,” Robinson said. “We’re expecting the proposed regulations on this any day now from the DOL, which was directed by President Donald Trump last year to move on this policy.”
As Robinson observed, the Trump administration issued an executive order last year that directed the DOL to facilitate alternatives in 401(k) plans. At the time, DOL officials were given 100 days to make a proposal, and they now appear to be in the final steps of that project, with Feb. 3 the 100-day mark.
“It appears they’re on track to meet that deadline,” Robinson noted. “After the rule is proposed, we think there will be an expedited comment period of 30 to 60 days, and then a final rule could be in place by the end of the year, with 2027 implementation.”
Robinson also expects Labor to remain active in filing amicus briefs in support of retirement plan sponsors being sued for alleged Employee Retirement Income Security Act violations.
“The DOL isn’t taking the position that class action lawsuits aren’t an important means of protection for retirement plan participants,” Robinson explained. “Instead, they are taking the position that so many of these lawsuits don’t have real legal merit and are instead being filed simply as a means of pursuing monetary settlement to enrich the plaintiffs bar.”
This article was originally published on BenefitsPRO, a sister site of HR Executive. For more content like this delivered to your inbox, sign up for BenefitsPRO newsletters here.
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