President Donald Trump on Tuesday officially nominated Daniel Aronowitz, an outspoken critic of frivolous ERISA class action litigation, to replace Lisa Gomez as Assistant Secretary of Labor.
The Senate-confirmed position oversees the Labor Department’s Employee Benefits Security Administration (EBSA), tasked with regulation and enforcement of private-sector retirement and health plans. According to the EBSA website, the agency oversees more than 801,000 private retirement plans, 2.6 million health plans, and 514,000 other welfare benefit plans, which collectively hold about $14 trillion in assets.
Aronowitz is the President of fiduciary liability insurance underwriting company Encore Fiduciary (formerly Euclid Fiduciary), and has 30 years of experience in this space. A widely recognized fiduciary liability expert and thought leader, he is the author of Euclid’s Fiduciary Liability Insurance Handbook and the fiduciary liability insurance chapter of the Trustee Handbook published by the International Foundation of Employee Benefit Plans. The Vienna, Va. resident is a graduate of Ohio State University and Vanderbilt University School of Law.
Retirement industry advocacy leaders were quick to show support for Aronowitz’s nomination.
“ICI offers our warm congratulations to Daniel Aronowitz on his nomination to lead EBSA. We are pleased that he is willing to enter public service and bring his keen understanding of the voluntary retirement system and ERISA fiduciary protections to bear at the agency. We look forward to his confirmation by the Senate and to working closely with him to support the millions of American investors who save for retirement using funds,” said Investment Company Institute (ICI) President and CEO Eric J. Pan, in a statement issued Wednesday.
“We are pleased that he is willing to enter public service and bring his keen understanding of the voluntary retirement system and ERISA fiduciary protections to bear at the agency.”
ICI President and CEO Eric J. Pan
“Dan is a seasoned veteran of the retirement plan industry and the American Retirement Association supports his nomination. We look forward to working with Dan to make further improvements to our nation’s retirement plan system,” Brian Graff, CEO of the American Retirement Association, said in a statement posted on LinkedIn Wednesday.
Aronowitz’s nomination has been referred to the Senate Health, Education, Labor and Pensions (HELP) Committee for consideration. If passed out of committee, he will be subject to a full Senate vote, which only requires a simple majority for approval.
As far as Aronowitz’s potential boss at the Department of Labor, on Jan. 21 President Trump appointed Vincent Micone as Acting Secretary of Labor. He is temporarily serving in that role until Trump’s nominee for the cabinet level Secretary of Labor position, Lori Chavez-DeRemer, is confirmed by the Senate. The former Congresswoman is scheduled for a committee hearing on Feb. 19, 2025.
Loud critic of ERISA class action abuse
In his position as President of Encore Fiduciary and author of the Fid Guru Blog, Aronowitz has advocated for stricter pleading standards in ERISA litigation to protect fiduciaries from meritless lawsuits. In a recent amicus brief related to the Casey Cunningham v. Cornell University case, Aronowitz emphasized the need for the Supreme Court to adopt more robust pleading standards, stating that current claims have transformed voluntary employee benefit programs into potential liabilities for fiduciaries acting in good faith.
He said “ERISA’s Most Absurd Case,” as he called the Cunningham case in a Jan 20 blog post, is about the future of ERISA litigation: “Will plaintiff firms be allowed to sue any plan in America for the simple fact that they hired a service provider, like a routine recordkeeper or an investment advisor? Will plaintiff lawyers be able to repackage fiduciary breach claims as prohibited transactions to avoid having to plead plausible proof of wrongdoing? The case is about whether unelected plaintiff lawyers are the regulatory auditors of America’s benefit plans. The stakes are real.”
Aronowitz went on to note that approximately 485 out of 1,350, or 36%, of large plans in America have been sued for alleged excessive fees in the last eight years.
“Any cynic of the plaintiffs’ bar would discern that many plans are being unfairly sued, because 35% of America’s large retirement plans, or over 50% of jumbo plans, cannot possibly have excessive fees… These lawsuits are not about excess retirement fees, but a business model in which ERISA fiduciary liability is being exploited for financial gain.”
Encore Fiduciary is also known for annually providing benchmark studies on recordkeeping fees and summaries of excess fee and imprudent investment litigation cases. Aronowitz held a webinar reviewing the current state of these cases on Jan. 28.
Pause on fiduciary rule appeals
Upon being confirmed as EBSA Secretary, Aronowitz would also be involved in the ongoing debate around the need for enhanced fiduciary standards. The DOL this week pushed the “pause button” on its consolidated appeals of two district court universal stays of its 2024 fiduciary rule in order to allow new leadership—still in the process of onboarding—to familiarize themselves with all of the issues presented by pending litigation.
The Feb. 11 filing says in order to allow new DOL officials “sufficient time to become familiar with the issues in these cases and determine how they wish to proceed, the government respectfully moves to place these consolidated appeals in abeyance, with status reports due at 60-day intervals.”
Per a Feb. 12 emailed media release from the National Association for Fixed Annuities (NAFA), Aronowitz has previously said he believes individuals benefit when they are dealing with fiduciaries—including on IRA rollovers—but Congress needs to amend ERISA if it wants this to happen. He has also acknowledged that the DOL exceeded its authority with the current pending fiduciary rule and that the DOL should defer to Congress in terms of how IRAs should be handled from a standpoint of fiduciary advice.
SEE ALSO:
• House Committee Urges DOL IG to Investigate EBSA
• EBSA Recovers Nearly $1.4B for Employee Benefit Plans, Participants
• Trump Taps Interim Leaders for SEC, DOL
• Key Takeaways to Consider in Wake of American Airlines ESG Opinion
• Groups Urge Supreme Court to Clarify ERISA Litigation Pleading Standards to Combat Surge in Frivolous Suits
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.
