The Trump administration has advanced several initiatives affecting US retirement savings policy, with some attracting bipartisan support and others remaining politically contentious. These efforts include:
- reducing fiduciary litigation risks associated with offering private funds and cryptocurrencies in participant-directed retirement plans;
- restricting consideration of environmental, social, and governance (ESG) factors in selecting plan investments and voting proxies; and
- implementing new Internal Revenue Code Section 530A Trump Accounts.
Other issues under consideration include expanding access to collective investment trusts (CITs) in Section 403(b) plans (the subject of proposed legislation in Congress), expanding retirement plan coverage such as by issuing guidance on pooled employer plans (PEPs), broadening prohibited transaction exemptive relief to accommodate relationship pricing and benefits, and addressing loose ends following the vacatur of the 2024 Department of Labor (DOL) fiduciary rule.
The November 2026 midterm elections, in which Democrats secured control of both chambers of Congress and gained previously Republican-held state governorships and legislative seats, introduce a new dynamic that could affect the direction and pace of these initiatives.
While the administration retains substantial authority to pursue its agenda through regulatory and other executive actions, divided government may complicate legislative efforts and subject certain regulatory initiatives—particularly those involving alternative investments and ESG—to increased scrutiny.
At the same time, initiatives aimed at expanding retirement savings opportunities and reducing plan costs may continue to attract bipartisan support, particularly with the increasing stresses on the Social Security system.
CONGRESSIONAL TOOLS FOR CHALLENGING ADMINISTRATIVE RULEMAKING
When the new Congress convenes in January 2027, Democrats will have several potential tools to challenge regulatory initiatives:
- The Congressional Review Act (CRA) permits Congress to disapprove agency rules through expedited procedures, including Senate procedures that generally avoid the 60-vote cloture requirement. However, disapproval resolutions must be presented to the president, who may veto them. Overriding a veto requires a two-thirds majority in both chambers, making successful CRA challenges to Trump administration rules unlikely without substantial Republican support.
- Oversight and investigations may prove more effective. Democratic committee chairs can convene hearings, request documents, issue subpoenas, and seek US Government Accountability Office investigations concerning DOL, US Department of Treasury (Treasury), and IRS initiatives. These actions do not require presidential approval and could delay regulatory action, influence agency decision-making, or prompt closer examination of the legal and policy rationale for agency initiatives.
- Appropriations restrictions offer another avenue. Congress could seek to prohibit agencies from spending appropriated funds to implement particular initiatives. However, funding restrictions generally require presidential approval or a veto override and may be more effective as negotiating leverage than as a means of permanently reversing policy.
- State governments may also play a pivotal role through litigation, including the increasing use of multistate suits and settlements. Democratic state attorneys general could challenge agency rules under the Administrative Procedure Act where they have standing or focus on service providers operations.
HOW MIGHT TRUMP ADMINISTRATION RETIREMENT PRIORITIES FARE
Alternative Investments and Cryptocurrency in Participant Plans
Efforts to facilitate private equity, private credit, cryptocurrency, and other alternative investments in participant-directed retirement plans are likely to attract significant scrutiny from Democratic lawmakers. In response to an executive order seeking to “democratize” access to alternative investments, the DOL proposed a rule that would offer a fiduciary safe harbor and presumption of prudence if plan fiduciaries consider specified factors in making investment selections.
Congressional Democrats have already criticized this rulemaking. This rule is currently at the Office of Management and Budget (OMB) for final review.
It is possible that Congress may initiate oversight hearings and investigations, and the final rules could potentially face CRA resolutions. However, given the administration’s strong support for this rule, it is unlikely that congressional action will stop it from taking effect. Nevertheless, application and adoption of the final rule could be muted by concerns of changes brought by a new administration in two years.
ESG Investing and Proxy Voting
The administration’s efforts to restrict consideration of ESG factors in investment selection and proxy voting are also likely to generate significant opposition. A proposed DOL regulation on this issue has been under OMB review since June 30.
Once the proposed rule is issued, it is possible that Democratic lawmakers may initiate hearings and oversight contending that the proposal’s expected restrictions improperly constrain fiduciaries from considering financially material investment risks and exercising shareholder rights in participants’ interests.
No CRA actions will occur unless and until a final regulation is published. Changes in the Texas legislature, specifically, and other state houses also warrant a reassessment of state-level restrictions on ESG investing.
Trump Accounts
Section 530A Trump Accounts, which are individual retirement accounts for children, have bipartisan support. As such, it is unlikely that congressional actions will challenge the program’s implementation as a whole. However, it is possible that legislation may be introduced attempting to address certain politically controversial elements of the program, such as the accounts’ naming convention or Treasury’s interpretations regarding eligible investments, including holding periods for donated securities.
RETIREMENT LEGISLATION
Collective Investment Trusts in 403(b) Plans
Expanding access to CITs in 403(b) plans may remain a promising area for bipartisan legislation. Supporters view the initiative as a means of reducing investment expenses and providing 403(b) participants with investment options that are more comparable to those available in 401(k) plans.
Because broader access may require amendments addressing federal securities law restrictions, congressional cooperation remains important. While lawmakers may seek additional disclosure and investor protections, substantial ideological opposition appears less likely.
This initiative may therefore offer one of the administration’s strongest opportunities for bipartisan progress.
Expanding Retirement Plan Coverage
Legislation to expand access to retirement savings arrangements may also present opportunities for bipartisan cooperation. The Retirement Savings for Americans Act, introduced with bipartisan support, would establish a federally facilitated retirement savings program for eligible workers who lack access to employer-sponsored plans.
While the proposal would require significant federal involvement, expanding retirement coverage has historically attracted support from both parties. Whether the new Congress will prioritize this or other coverage initiatives remains unclear.
OTHER AREAS TO WATCH
Pooled Employer Plans
While we are unaware as to whether DOL is currently developing additional guidance concerning PEPs, efforts to expand their use may continue to attract bipartisan support. PEPs were established through bipartisan legislation to broaden retirement plan coverage, and future regulatory or legislative initiatives aimed at facilitating their adoption may present opportunities for cooperation despite divided government.
Prohibited Transaction Relief for Relationship Pricing
A proposal to expand prohibited transaction exemptive relief for relationship pricing arrangements and benefits is currently under OMB review. While such relief could reduce costs and provide additional benefits to retirement investors, the prior DOL resisted similar requests for several years, reflecting concerns about potential conflicts of interest.
Given these competing considerations, it is difficult to predict whether the change in congressional control will materially affect the proposal’s prospects or DOL staff’s perspective regarding this type of relief.
Fiduciary Rule Aftermath
Following the vacatur of the 2024 DOL fiduciary rulemaking, there has been interest in restoring certain amendments from that rulemaking, including expanded prohibited transaction relief for principal transactions. It remains uncertain whether or how the agency will address this, and the potential impact of the new Congress is unclear.
Saver’s Match
Treasury and IRS are developing regulations to implement Saver’s Match under the SECURE 2.0 Act (SECURE 2.0), which will provide federal matching contributions for eligible lower- and moderate-income retirement savers beginning in 2027. While implementation raises administrative and operational questions for retirement plan providers, the initiative originated in bipartisan legislation.
In April, President Trump issued an executive order directing Treasury to establish TrumpIRA.gov, a platform intended to expand access to low-cost IRAs and facilitate participation in the Saver’s Match program. Treasury and the IRS subsequently issued guidance addressing implementation of the Saver’s Match and its coordination with TrumpIRA.gov.
These developments suggest continued support for implementing the statutory program, although the administration’s emphasis on IRA-based retirement savings is notable and may influence operational requirements. The change in congressional control does not necessarily suggest a significant change in regulatory direction.
Automatic Portability
DOL’s regulatory agenda also includes finalizing regulations implementing SECURE 2.0’s prohibited transaction exemption for certain automatic portability arrangements, which are intended to facilitate transfers of retirement savings when employees change jobs. Because the initiative originated in bipartisan legislation and is intended to reduce retirement savings leakage, it may attract less congressional opposition than more contentious investment-related initiatives.
IMPLICATIONS FOR RETIREMENT PLAN SPONSORS AND SERVICE PROVIDERS
The 2026 midterm elections may ultimately have a greater effect on how retirement policy develops than on which initiatives the administration pursues. Congressional oversight, investigations, and litigation could delay or narrow contentious regulatory initiatives, particularly those that relate to plan investment options and fiduciary liability, but the president’s veto authority will limit Congress’s ability to reverse administration policy through legislation or the CRA.
At the same time, bipartisan opportunities may remain for initiatives that expand retirement coverage, increase retirement savings, improve administrative efficiency, or reduce plan costs. These efforts will unfold against the backdrop of Social Security’s significant long-term financing challenges, which may increasingly compete for congressional attention and underscore the importance of strengthening private retirement savings.
Plan sponsors, fiduciaries, and service providers should monitor both federal regulatory developments and state-level challenges, particularly concerning alternative investments, ESG, and fiduciary advice. Implementation decisions should account for the possibility of litigation and potential regulatory changes.
