The 2024 fiduciary rule, known as the Retirement Security Rule, has been vacated. The Department of Labor (DOL) reinstated the 1975 five-part test as the standard for ERISA fiduciary status, so the rules governing who counts as a fiduciary to your plan have effectively reset to where they stood before. For plan sponsors, the practical question is whether your current advisor relationships and governance documentation still hold up under the standard that’s now back in force.
What actually changed?
The 2024 rule was vacated after the DOL declined to challenge industry groups’ motions for final judgment. In March, the U.S. District Court for the Eastern District of Texas issued a ruling to vacate the rule, unopposed by both the DOL and key industry groups. The 2024 version would have extended ERISA fiduciary duties to cover certain one-time professional retirement investment recommendations, such as rollovers, annuity purchases, and plan menu design. With it gone, those one-time recommendations are no longer automatically fiduciary acts.
What standard applies now?
On March 20, the DOL published guidance formally reinstating the 1975 five-part test and republished Prohibited Transaction Exemption 2020-02 in its original 2020 form. Under the five-part test, a financial professional is only considered an ERISA fiduciary if they provide investment advice on a regular basis, under a mutual agreement that the advice will serve as a primary basis for investment decisions, and for direct compensation. The takeaway for a finance leader: not every recommendation your plan receives carries fiduciary protection by default.
Is this the final word?
No. The DOL has indicated it intends to revisit the rule, with a new version expected sometime in 2026. The department hasn’t released substantive details, but has said the new version “will ensure that the regulation is based on the best reading of the statute” and will align with an executive order calling on departments to reduce regulatory burden. Expect movement, not stability.
What should a finance leader do now?
The reset is a good reason to confirm where your plan stands. A few steps to put your committee in a stronger position:
- Confirm your advisor’s fiduciary status in writing, including whether they serve as a 3(21) or 3(38) fiduciary.
- Review which services are covered under a documented fiduciary process and which are one-time recommendations.
- Make sure your committee files show a clear, defensible governance trail regardless of which rule is in effect.
The takeaway
Regulatory standards will keep shifting, but your obligation to run a documented, defensible process doesn’t move with them. Knowing exactly where your fiduciary coverage starts and stops protects the plan and the committee, no matter what the next rule says.
To review how the reinstated five-part test affects your plan’s fiduciary coverage, or to document your current governance process, let’s talk. You can also reach Advo(k)ate Advisors at 866-608-8650.