DOL Lets Biden-Era Fiduciary Rule Die in Court

Brian Anderson

2 hours ago

Court filings this week in Texas show the Department of Labor declining to challenge motions for final judgment filed by industry groups that originally sued to block its beleaguered 2024 iteration of the fiduciary rule—known as the Retirement Security Rule.

With the government now aligned with the plaintiffs, the Biden-era regulation is effectively finished—pending a final court order expected in the coming weeks.

This clears the way for the Trump-era DOL to issue yet another revised fiduciary rule, which could happen as early as May 2026 according to its own regulatory agenda. Officials have hinted that any new proposal will aim to better align with the Employee Retirement Income Security Act’s statutory framework and address concerns raised by the courts.

The now-dead rule finalized in April 2024 sought to expand the definition of “investment advice fiduciary” under ERISA. It was designed to require more financial professionals—including brokers and insurance agents—to meet a fiduciary standard when advising on retirement accounts such as IRAs and small employer plans.

Rule never takes effect

The Retirement Security Rule was scheduled to take effect in September 2024, but insurance industry trade groups quickly challenged the regulation in federal court, arguing the Labor Department had exceeded its authority under ERISA.

Two federal district courts in Texas issued nationwide injunctions in July 2024 blocking the rule before implementation. Those rulings came in separate lawsuits filed by insurance and financial industry groups, including the Federation of Americans for Consumer Choice.

The litigation continued into 2025, but the political landscape shifted after the 2024 presidential election. By late 2025, the Trump administration’s Department of Labor stopped actively defending the rule in court.

Now, the agency has taken the final step by joining or declining to oppose motions seeking to vacate the rule entirely.

In one case, the Department of Labor filed a joint motion with the plaintiffs asking a federal court to formally vacate the regulation. In a second case pending in another Texas federal court, the department similarly declined to oppose a motion seeking final judgment against the rule.

With both sides now supporting the same outcome, the court’s final order is widely viewed as a procedural formality.

Latest chapter in long battle

The demise of the Retirement Security Rule marks another chapter in the Labor Department’s long-running effort to impose a fiduciary standard on a broader range of retirement advice.

Since 2010, regulators have repeatedly attempted to expand the definition of fiduciary advice under ERISA to ensure financial professionals place clients’ interests ahead of their own when providing retirement investment recommendations.

As fee-only financial planner Jason Siperstein succinctly put it in a March 11 blog post: “Four attempts. Sixteen years. Zero enforceable protections.”

The most sweeping attempt came in 2016, when the Obama administration finalized a broad fiduciary rule that would have applied to many brokers, agents and advisers working with retirement investors.

That rule was ultimately vacated in 2018 by the U.S. Court of Appeals for the Fifth Circuit, which ruled that the Department of Labor had exceeded its statutory authority.

The 2024 Retirement Security Rule was designed as a narrower version intended to survive the legal challenges that doomed the earlier regulation. It specifically targeted one-time recommendations involving retirement assets, including IRA rollovers, annuity purchases and investment menu design for smaller retirement plans.

But industry groups argued the new rule remained too similar to the 2016 version and again challenged it in court.

The next chapter of the never-ending saga is tentatively scheduled to start in May 2026, when the DOL may propose its next iteration of a replacement fiduciary rule.