The Department of Labor’s Employee Benefits Security Administration (EBSA) sent its final rule, Fiduciary Duties in Selecting Designated Investment Alternatives (RIN 1210-AC38), to the White House Office of Management and Budget (OMB) for review on Nov. 5, according to a report today from the Insured Retirement Institute.
OMB clearance is the last step before the Labor Department can publish a final rule. While IRI noted that OMB does not have a deadline for clearing the rule, OMB and its Office of Information and Regulatory Affairs (OIRA) are expected to take between 60 and 90 days to review the final rule before it would be published in the Federal Register.
OIRA officially classifies the rule as economically significant, underscoring the potential scale of its implications.
EBSA proposed the rule in March to implement President Donald Trump’s Aug. 7, 2025 Executive Order 14330 on access to alternative assets for 401(k) investors. It establishes a process-based, asset-neutral safe harbor for a fiduciary’s duty of prudence under ERISA when selecting designated investment alternatives for participant-directed defined contribution plans.
The proposed safe harbor is intended to provide greater clarity and greater legal certainty for fiduciaries that follow a prudent investment selection process, including when evaluating funds with exposure to private markets. However, it would not eliminate fiduciaries’ responsibilities under ERISA or automatically make alternative investments appropriate for every plan.
The subsequent public comment period for the proposed regulation generated more than 47,000 comments, sparking House and Senate committee leaders to call for investigations into potentially fraudulent public comments after thousands of near-identical comments were submitted in support of the DOL proposal.
Once OMB concludes its review of the final rule and it is revealed via publication in the Federal Register, the industry will see what—if any—changes to the proposed rule were made in the final rule as a result of the input received during the comment period.
The final regulation is expected to become effective toward the end of the first quarter of 2027, with significant impacts for all fiduciaries involved in selecting investments. It is expected to explain the steps that managers of 401(k) plans should take when considering alternative assets as a component in their investment lineups and establish a set of process-based safe harbors for plan fiduciaries to use when selecting designated investment alternatives.
SEE ALSO:
• Labor Critics Demand FBI Investigation into Bogus 401(k) Rule Support
• DOL Unveils Fiduciary Rule Opening Door to Alternative Investments in 401(k)s
• Interest in Private Assets in 401(k) Plans Surges: Schroders