CFP Board Warns DOL’s Proposed Rule Risks Treating Process as the Equivalent of Prudence

On June 1, 2026, CFP Board submitted a comment letter to the U.S. Department of Labor regarding its proposed rule, Fiduciary Duties in Selecting Designated Investment Alternatives. In the letter, CFP Board supports the Department’s interest in clarifying fiduciaries’ duties under the Employee Retirement Income Security Act of 1974 (ERISA) when selecting designated investment alternatives for participant-directed individual account plans, but states that the Department must revise the proposal and reissue it for public comment so that any final rule preserves strong participant protections and outcomes.

CFP Board’s letter emphasizes that retirement plan fiduciaries must do more than follow a prescribed process or document their consideration of enumerated factors. Instead, the final rule should make clear that fiduciaries must continue to exercise reasonable judgment and act prudently based on the facts and circumstances relevant to the plan and its participants. CFP Board warns that, as drafted, the proposal could inappropriately elevate process over substance, create confusion through rules-based examples embedded in the regulatory text itself, and encourage more complex, illiquid, expensive, and difficult to value products without sufficient participant-focused justification. These characteristics make alternative assets particularly inappropriate for most participant-directed defined contribution plans, as many retirement savers are unprepared to meaningfully evaluate alternative investments and are at heightened risk of making poorly informed decisions.

“The Department should ensure that any final rule strengthens participant protections without turning ERISA prudence into a check-the-box exercise,” said Erin Koeppel, J.D., Managing Director, Government Relations & Public Policy Counsel at CFP Board. “Fiduciaries must continue to exercise sound judgment in light of the needs of plan participants, and the final rule should not create incentives to favor alternative investments that are not grounded in plan-specific, participant-focused analysis.”

CFP Board recommendations to strengthen and clarify the rule urge the department to:

• Emphasize that ERISA’s duty of prudence requires both a careful process and a prudent outcome.
• Remove the proposal’s examples from the operative regulatory text and instead issue them in sub-regulatory guidance.
• Revise and add to the enumerated factors to provide more complete and workable guidance.
• Preserve genuine asset neutrality for any process.

CFP Board’s letter underscores its broader support for a fiduciary standard for all financial advice and its commitment to helping policymakers develop sound, participant-focused retirement policy.

Read CFP Board’s comment letter here.