Texas Court Puts Nail in Coffin of Biden-Era Fiduciary Rule

A federal judge in Texas on Tuesday, March 17, vacated the U.S. Department of Labor’s 2024 fiduciary rule, known as the “Retirement Security Rule,” voiding what had been a key regulation pushed through during the Joe Biden presidential administration.

The rule had expanded fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA) to include many 401(k) rollovers and annuity recommendations, providing guardrails to how financial services providers give compensated investment advice to retirement plan participants, individual retirement account (IRA) owners and plan officials responsible for administering plans and managing their assets.

Specifically, it:

• Updated the definition of an investment advice fiduciary to include those who, in certain cases, provide financial advice on a one-time basis (e.g., investment advisors who guide 401[k] rollovers and small employer plans).
• Clarified that HR professionals who conduct typical retirement plan work are not acting as fiduciaries.
• Set forth the standards of service that fiduciaries must provide.

The rule was challenged by industry groups — including the Federation of Americans for Consumer Choice (FACC), the American Council of Life Insurers (ACLI), the Securities Industry and Financial Markets Association (SIFMA) and the Financial Services Institute (FSI) — that argued it exceeded the DOL’s authority, mirroring a similar failed rulemaking effort in 2016. Lawsuits initiated by FACC and ACLI stayed the 2024 rule’s implementation. (SIFMA and FSI were plaintiffs-intervenors in those lawsuits.)

The March 17 court decision, handed down by Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas, was the final nail in the coffin. However, the DOL under the current Donald Trump presidential administration effectively gave O’Connor the hammer in late 2025 by ending its defense of the regulation.

Following the ruling, SIFMA and FSI issued a joint statement supporting the decision.

“As we explained in our complaint, ‘[l]ike the 2016 rule, the 2024 rule is inconsistent with the common law, contravenes the statutory text and impermissibly attempts to regulate the provision of services to accounts over which the Labor Department has no regulatory authority,” it stated. “Indeed, the illegality of the 2024 rule is even clearer today. ... This decision is a win for investors because the unlawful expansion of the definition of a ‘fiduciary’ would have jeopardized investors’ access to advice and education.”

As a result of the court decision, the 1975 five-part test for defining an investment advice fiduciary remains in place. Under that regulation (which the first Trump administration had reinstated and clarified in 2020), an entity must meet all five test elements to be considered a fiduciary. These include:

• Advice requirement. The entity provides advice or recommendations regarding the value of, or investing in, securities or property.
• Regular basis. The advice is provided on a “regular basis.”
• Mutual understanding. The advice is given pursuant to a “mutual agreement, arrangement or understanding.”
• Primary basis. The advice serves as a “primary basis” for investment decisions.
• Individualized advice. The advice is tailored to the specific needs of the plan or IRA.

Movement on a new fiduciary rule, though, is in the works.

On Dec. 11, 2025, President Trump issued an executive order titled “Protecting American Investors from Foreign-Owned and Politically Motivated Proxy Advisors.” This order instructed Secretary of Labor Lori Chavez-DeRemer to “revise all regulations and guidance regarding the fiduciary status of individuals who manage — or, like proxy advisors, advise those who manage — the rights appurtenant to shares held” by ERISA-covered plans. Specifically, the order directed the DOL to:

• Consider whether its fiduciary rule should be revised to explicitly include proxy advisors within the definition of “investment advice fiduciaries” under ERISA plans; and,
• Take appropriate actions to enhance the transparency of proxy voting practices and policies, particularly as they relate to diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) factors.

The DOL has indicated it plans to issue a new rule by May.

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