Have you ever been on a team that suddenly lost a chunk of its best players? Everything changes, right? The game plan gets thrown out, and you have to get creative just to stay competitive.
Well, that’s pretty much what’s happening right now at the Department of Labor (DOL), specifically within the Employee Benefit Security Administration, or EBSA. This is the agency that enforces the rules for our retirement plans (think ERISA), so what happens there has a real ripple effect on the entire financial services world.
They’re dealing with a staff that’s been cut by about 20% under the Trump administration, and a new leader, Daniel Aronowitz, has just taken the helm. To say he has his work cut out for him is an understatement. He’s going to have to be incredibly creative, and it means we’re about to see a whole new approach to some of the biggest debates in our industry, like the fiduciary rule and ESG investing.
A Whole New Ballgame at the EBSA
I was listening in on a recent webinar with Brad Campbell and Fred Reish—two partners at Faegre Drinker Biddle & Reath who really know their way around Washington—and they laid out the situation perfectly. Aronowitz is essentially managing a much lighter department.
Fred Reish pointed out that dozens of employees were let go as part of a broader effort to downsize the federal government. He thinks this will force agencies to rethink how they operate and find new efficiencies. But let’s be honest, that’s the optimistic view.
He also said, “I think it's counterproductive, and that they've lost a lot of the people who really understood the agency's mission, how things are accomplished.” And that’s the part that makes you pause. You can’t just replace decades of institutional knowledge overnight.
Is This a "Break It to Fix It" Strategy?
Brad Campbell, who actually ran EBSA for a bit under President George W. Bush, had an even bolder take. He believes the administration is “intentionally” breaking things to clear the way for reform.
It’s a high-risk, high-reward strategy. On one hand, Campbell says, “There is a lot of institutional knowledge that leaves, but it is going to create the opportunity to build something new.” The big question, as he puts it, is whether they’ll be able to build something good in its place.
We’re already seeing the impact of these changes in the numbers. Think about this: back in 2010, the DOL was closing over 3,000 civil cases a year. That number has been steadily dropping ever since. Last year? They closed just 729 cases. And that was before a lot of these staffing changes really took hold. It tells you the agency’s capacity to investigate and enforce is already stretched thin.
The ESG Tug-of-War Continues
One of the biggest battlegrounds this leaner EBSA has to navigate is ESG investing—that’s environmental, social, and governance factors. It’s been a regulatory pendulum swinging back and forth for years.
It started under the Obama administration, which gave guidance allowing plan fiduciaries to consider ESG factors as long as they were financially relevant. Then, the first Trump administration pumped the brakes, emphasizing that financial returns had to be the one and only priority.
The Biden administration swung the pendulum back, trying to make it easier to integrate ESG without getting into trouble. But that move got tied up in legal challenges.
Now, it looks like the pendulum is swinging back yet again. ESG is officially on the regulatory agenda for May 2026. Campbell’s prediction? "I suspect it'll be rescinding the old rule, notice and comment rule-making on a new rule." Basically, expect the Biden-era rule to get tossed out and replaced with something new.
So, What’s Happening with the Fiduciary Rule?
Ah, the fiduciary rule. If you’ve been in this industry for more than a few years, you know this story well. The effort to expand the fiduciary duty—the requirement for financial professionals to act in their clients’ best interest—has been a long and winding road.
We’ve seen different versions come and go since the Obama administration’s rule back in 2016, most of them getting shot down in court. The latest attempt, the Biden administration’s "Retirement Security rule," is currently on ice, stayed by two different courts.
For most of this year, the Trump administration has been asking the court for more time to figure out its next move. But according to Campbell, the Fifth Circuit Court of Appeals is starting to lose its patience and is pushing for a stricter schedule.
Frankly, nobody seems to think the rule will survive in its current form. Campbell acknowledged it’s highly unlikely.
And Fred Reish? He didn't mince words at all. "I don't think there's a snowball's chance that regulation is going to survive the Trump administration," he said. "I think we can kiss the Biden-era fiduciary regulation goodbye, take it out of our memory banks and get on with life."
It’s a blunt assessment, but it reflects the reality of the situation. With a new administration and a judiciary that’s been skeptical of past efforts, the fiduciary debate is heading for another major reset.
One thing is crystal clear: the Department of Labor we knew a few years ago is not the one we have today. With fewer people on staff and a clear mandate to change course, we’re in for a period of significant upheaval. The rules of the road for retirement plans are being rewritten, and we’ll all be watching very closely to see what gets built from here. It definitely won't be business as usual.
