Trump Labor Department to End Defense of Biden 401(k) Rule (1)

The US Labor Department is looking to dismiss its challenge to a pair of federal district court decisions that froze a Biden-era 401(k) investment advice regulation, according to a Monday court filing.

The DOL’s Employee Benefits Security Administration no longer wants to defend the Biden administration’s fiduciary rule, it told the US Court of Appeals for the Fifth Circuit in an unopposed motion to dismiss.

The agency already said in the first regulatory agenda of President Donald Trump’s new administration that it would rewrite the regulation.

The new filing ends a long-running legal fight that began shortly after the fiduciary rule was finalized in 2024, expanding strict standards of conduct into 401(k) rollovers. Life insurance industry groups quickly challenged the regulation, resulting in two federal district courts in Texas pausing its implementation.

The two separate cases filed by the American Council of Life Insurers and the Federation of Americans for Consumer Choice in federal court were consolidated as one appeal before the Fifth Circuit after both lower courts stayed the rule. The DOL said in its Monday filing the groups, as well as intervenors, agree the appeal should be dismissed.

Th appeal was repeatedly put on hold, starting earlier this year, by request of the Trump administration, which said it needed time to review the Biden rule.

The insurer groups challenged the rule on Administrative Procedure Act grounds, contending it exceeded its regulatory authority under the Employee Retirement Income Security Act, as they said it had with an Obama-era version that the Fifth Circuit vacated in 2018.

The DOL under Biden argued its new attempt at the 401(k) rule didn’t suffer the same flaws, because it focused on the principal of “trust and confidence” under ERISA in one-time retirement rollover advice that the new regulation would cover.

The Texas federal courts disagreed, noting in their July 2024 rulings that the DOL failed to adequately differentiate its new fiduciary rule from the old.

The 2024 Loper Bright Enterprises v. Raimondo US Supreme Court decision also provided fodder for the regulation’s opponents. The high court decision eliminated a doctrine that required judicial deference where laws are ambiguous or silent.

The new fiduciary rule will compete with other EBSA regulatory priorities under its new chief chosen by Trump, former insurance executive Daniel Aronowitz.

The agency said it will eliminate and rewrite another key Biden rule that deals with environmental, social, and governance considerations in 401(k)s. It’s also due to issue highly-anticipated guidance that would ease the way for more alternative assets in workers’ retirement accounts, including private equity and cryptocurrencies.

The case is Fed’n of Ams. for Consumer Choice, Inc. v. DOL, 5th Cir., No. 24-40637, motion to dismiss filed 11/24/25.