Aronowitz Makes Case Against Frivolous ERISA Lawsuits at NAPA
EBSA head Daniel Aronowitz took his well-documented case to NAPA Nation on Sunday, opening the 2026 NAPA 401(k) Summit in Tampa by illustrating how he thinks a growing wave of frivolous ERISA lawsuits is harming the retirement system rather than protecting participants.
Aronowitz, officially the Assistant Secretary, Employee Benefits Security Administration at the U.S. Department of Labor, said plan sponsors are increasingly “paralyzed” by litigation risk, leading them to focus on avoiding lawsuits instead of improving plans—which in turn is stifling innovation in plan design.
He provided a detailed history lesson to outline the issue, beginning with the long-running saga of the Intel Imprudent Investment case while noting Intel is certainly not alone in being sued for alleged fiduciary malpractice in its company-sponsored retirement plan.
“Hundreds of excessive fee and performance malpractice cases have been filed against American plan fiduciaries in the last 15 years by an enterprising and ever-growing ERISA plaintiffs bar,” Aronowitz said. “The private retirement system has been swamped with lawsuits challenging fee and investment decisions, with over half of jumbo plans sued in the last 10 years—litigation that has almost exclusively benefited plaintiff lawyers who have secured well over $500 million in fees in these cases whereas most plan participants take home only a token $25 to $100. This is a scam.”
To combat this, Aronowitz referred to President Trump’s Executive Order last August, which he said was designed to democratize investments in 401(k) plans to achieve the best possible risk-adjusted returns and retirement security for American workers and their families.
“A key tenet of the President’s Executive Order is the recognition that innovation and creativity in retirement plans has been stymied by litigation abuse such as the Intel case,” he said. “Alternative investment used in 99% of governmental plans are not available to private sector workers not because they do not work or add value to retirement benefits, but primarily because of the fear factor of class action litigation.”
Aronowitz went on to outline the DOL’s recently released proposed Investment Selection Rule, which aims to reduce litigation fear that currently discourages plan sponsors from offering investments—especially alternatives widely used in government plans.
“The details matter. Team EBSA is proud of our effort. But now it is your turn to comment on the record. Tell us how we can make the proposed rule better before we work on the final rule.”
Daniel Aronowitz
He stressed that litigation risk—not investment quality—is the main barrier preventing private-sector workers from accessing certain asset classes.
He added that the proposed regulation emphasizes thorough, objective analysis and documentation, not superficial compliance. It is built on three ERISA principles: Process, Discretion, and Deference, and establishes six factors and 20 examples to guide a rigorous, well-documented investment selection process.
The rule, he said, is designed to encourage broader investment options and innovation in retirement plans by shielding prudent fiduciaries from excessive second-guessing.
Aronowitz also made a point of encouraging NAPA attendees to provide comments. The 60-day comment period on the proposed rule closes on June 1, 2026.
“The details matter. Team EBSA is proud of our effort. But now it is your turn to comment on the record,” Aronowitz said. “Tell us how we can make the proposed rule better before we work on the final rule.”
He said the DOL’s Investment Selection Rule is not about reckless institutional gambling with fiduciary plan assets, but is about potential diversification and maximizing risk-adjusted returns.
“We are not dictating any investment selection or strategy. The proposed rule was about ensuring that American workers have an opportunity to retire in comfort and dignity,” he said. “We are empowering responsible fiduciaries to make responsible investment decisions from a larger share of potential investment opportunities.”
As he closed his remarks to the NAPA 401(k) Summit audience on Sunday, Aronowitz again emphasized how the rule is designed to encourage broader investment options and innovation in retirement plans by shielding prudent fiduciaries from excessive second-guessing.
“As the Director of Policy Justin Danhof at EBSA likes to say, ‘You have been limited to the salad bar, and now you get the whole buffet,’” Aronowitz concluded. “We are helping plan advisors like you do your jobs to help improve the retirement security of American workers.”
Graff thanks Aronowitz for leadership
Immediately following his presentation to NAPA attendees on Sunday, Aronowitz sat down with ARA CEO Brian Graff to further discuss EBSA priorities.
Graff began by reiterating how frivolous litigation has been a major concern for the workplace retirement plan system for a very long time, and expressed appreciation to Aronowitz for taking it on.
“I cannot thank you enough for your commitment to trying to address that,” Graff said. “The threat of litigation—if you talk to plan sponsors, that’s the No. 1 thing they worry about. It has had an incredibly negative effect on plan innovation, and unless we can stem the tide as you are trying to do, we’re never going to get to a place where plan sponsors are comfortable innovating for their plans and most importantly for their participants. And that’s really to the detriment of the participants.”
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.