Retirement in the Next Decade: Policy Direction and Innovation in Focus

At an event hosted by Mayer Brown in early May, SIFMA President & CEO Kenneth Bentsen sat down with Department of Labor Assistant Secretary Dan Aronowitz for a candid conversation about where retirement policy is headed.

The U.S. retirement system is at an inflection point. Defined contribution plans cover tens of millions of American workers, yet the menu of investment options available inside most 401(k)s has barely evolved in decades. Litigation risk, regulatory ambiguity, and fear of second-guessing have created a chilling effect—one that keeps some fiduciaries from exploring new strategies, let alone adopting them.

As Aronowitz emphasized at the event, the Department is working to balance a continued focus on ERISA’s foundational fiduciary duties—prudence and loyalty—while ensuring the regulatory framework remains workable for plan sponsors.

Back to Basics: ERISA Is a Law of Process, Not Outcomes

The centerpiece of Aronowitz’s remarks was EBSA’s proposed rule on designated investment alternatives—essentially a framework for fiduciaries to evaluate the full universe of investment options, including alternative assets, for inclusion in retirement plans.

The framing matters: EBSA is not endorsing any particular asset class. Instead, they are clarifying a return to an asset-neutral framework—the approach ERISA was always supposed to take. The rule reaffirms that what counts is not what you choose, but how you chose it.

To give that principle some teeth, the proposal introduces the concept of an “objective, thorough, and analytical” (OTA) process and offers concrete examples of what that looks like in practice. It provides a clear decision-making process that, if followed, gives fiduciaries a safe harbor from hindsight-based litigation.

The goal, as Aronowitz put it, is to give plan sponsors the confidence to evaluate new strategies—rather than defaulting to the familiar out of fear of litigation.

The Enforcement Reset: Predictability Over Gotcha Moments

Hand-in-hand with the rulemaking is EBSA’s new Field Assistance Bulletin on enforcement principles—a document Aronowitz described as a meaningful step toward transparency and predictability.

The bulletin establishes four guiding principles for how EBSA will conduct enforcement going forward:

• Focusing enforcement resources on the most significant harms, especially violations of the duty of loyalty
• Combating “regulation by enforcement” by setting clearer expectations upfront
• Requiring senior-level review for significant cases, increasing accountability
• Setting defined investigation timelines: roughly 18 months for routine matters, 30 months for complex ones

Enforcement will remain rigorous—Aronowitz was clear on that. But the agency will not penalize fiduciaries for bad outcomes when their process was sound. That distinction—process versus outcome—is foundational to ERISA which Aronowitz noted has been blurred by enforcement trends in recent years.

The Real Prize: Unlocking a New Generation of Retirement Products

Why does any of this matter beyond the compliance shop? Because the practical upshot could be significant product innovation inside retirement plans.

Aronowitz sketched out a near-term vision where target date funds—the workhorse of the defined contribution world—begin incorporating alternative assets with appropriate risk management. That may sound incremental, but for an industry where the default menu has barely changed since the Pension Protection Act, it represents a meaningful shift.

Longer term, clearer guidance on fiduciary process could open the door to new plan designs—products that might better match the investment horizon of retirement savers with strategies that have historically been available only to institutional or high-net-worth investors.

SIFMA’s View

SIFMA has long advocated for a retirement framework that pairs strong investor protections with the flexibility for real innovation. We believe fiduciaries need clear rules of the road—grounded in process and documentation—to confidently evaluate a broader investment universe on behalf of participants.

The direction EBSA is heading is encouraging. If the proposed rule and the FAB enforcement principles hold, we could see a meaningful unlocking of retirement plan innovation—one that benefits the millions of American workers depending on these plans to fund their futures.

SIFMA will continue to engage constructively with policymakers to advance policies that support innovation, strengthen retirement security, and deliver better outcomes for American savers.