Judge KOs Labor Department’s latest fiduciary rule

A federal judge vacated the DOL's latest attempt to expand fiduciary duty.

By John Hilton

A federal judge officially killed the Department of Labor's Retirement Security Rule on Tuesday.

District Judge Reed O'Connor acquiesced to the request from both the DOL and the group of trade groups suing to stop the rule.

“Today’s decision rightly vacates and sets aside the 2024 Rule, which exceeded the DOL’s statutory authority and was arbitrary and capricious," the Securities Industry and Financial Markets Association and Financial Services Institute said in a joint statement. "The order ensures that financial advisors can continue to provide the services best suited for each individual client. The 2024 rule was materially indistinguishable from a 2016 DOL rule that was struck down by the Fifth Circuit in 2018."

"This is a big win for retirement savers," said David Chavern, president and CEO of the American Council of Life Insurers. "ACLI is proud to have led a coalition of insurance trade associations to protect consumers while preserving choice and access to financial professionals."

Since 2015, the DOL has made multiple efforts to expand the definition of “fiduciary” under the Employee Retirement Income Security Act of 1974, aiming to require that financial professionals who give retirement advice — including brokers, agents and insurance sellers — put clients’ best interests first.

So far, the industry is undefeated in opposing such efforts.

“Today’s court ruling is a major win for every American saving for retirement,” said Finseca CEO Marc Cadin. “The Fiduciary Rule placed barriers to Americans trying to save for retirement. Removing this regulation makes it easier for retirement savers to access the sound professional advice that creates results.”

The DOL is expected to issue a revised fiduciary rule in or about May 2026, as noted in the department’s regulatory agenda.

Finseca, the American Council of Life Insurers and others recently met with DOL Secretary Lori Chavez-DeRemer and Assistant Secretary Daniel Aronowitz to discuss the future rule.

"Overall, I was extremely impressed with the DOL’s leadership," Cadin said in an email to members. "They asked terrific questions, listened to our perspective, and were extremely committed to promoting lifetime income solutions like annuities that so many Americans rely on and so many more need."

In April 2016, the DOL finalized a broad fiduciary rule set to apply in 2017, but that rule was vacated in 2018 by a federal appeals court, which said the agency had exceeded its authority.

In April 2024, under a new administration, the DOL issued another rule — dubbed the Retirement Security Rule — again expanding the fiduciary definition to include many more retirement-investment advisors and amending prohibited-transaction exemptions.

The rule was slated to take effect in September 2024. However, legal challenges quickly followed. In July 2024, a federal judge issued a nationwide stay, blocking implementation while the lawsuit proceeded.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.