I read with some enjoyment the summarization of the Marcia Wagner / Fred Reish / Jamie Fleckner panel. One of the challenges of the National Association of Plan Advisors annual conference is the need to be in multiple places at the same time. The six investment selection factors, class certification, benchmarks, and managed accounts discussion was robust. The very clear common thread? Everything we are observing in the 401k arena is still anchored in one core principle: ERISA is a process-driven statute, and the battleground has shifted to how well that process is executed and documented.
What has evolved is the intensity, specificity, and allocation of responsibility around that process.
1. The foundation has not changed: prudence = process, not outcomes
The Department of Labor is reinforcing—almost aggressively—that fiduciary decisions are judged based on the quality of the decision-making process at the time, not hindsight performance.
The proposed rule explicitly reaffirms ERISA as “a law grounded in process.”
Courts continue to support this view—poor outcomes alone do not equal imprudence if the process was sound.
Bottom line: You are still defending how decisions were made, not how they turned out.
2. The process is being standardized into a quasi-checklist
This is the real shift—and where things get more dangerous.
The DOL’s six-factor framework (fees, performance, liquidity, valuation, benchmarks, complexity) is effectively becoming a minimum viable process standard.
If followed → courts are expected to defer to fiduciaries
If missed → plaintiffs now have a structured attack path
The rule risks becoming a “checklist” plaintiffs can use.
This is a double-edged sword. It provides clarity, but it also lowers the creativity required for litigation. I also think I am seeing committee minutes that are running into tens of pages long as each investment would have to be defended on these six criteria. This framework is still pending.
3. The burden is shifting toward advisors—not just plan sponsors
Advisors are no longer just support—they are part of the fiduciary risk surface.
The rule repeatedly emphasizes “advisor” responsibility alongside fiduciary duty
The litigation environment is explicitly being tied to advisory conduct
The language density (litigation + advisor references) is not accidental
Implication: If an advisors is influencing decisions, they are increasingly expected to demonstrate a prudent process—not just recommend one. And if a plan does not have an advisor, this looks to be an awfully lonely road to travel.
4. Litigation risk is still the underlying driver of everything
Every one of these developments—alternatives, ESG, managed accounts, benchmarking—connects back to one issue:
Plans are not avoiding investments because of merit—they are avoiding them because of litigation risk.
The DOL is trying to:
Encourage innovation (e.g., alternatives)
Reduce defensive decision-making
Provide “safe harbor” through process clarity
But paradoxically:
More guidance = more discoverable standards
More standards = more ways to be challenged
I still find myself scratching my head on alternatives given the complexity of the investments and quite a few questions I have running around in my head.
5. The real evolution: from “have a process” to “prove your process”
It’s no longer enough to:
Have a prudent process
Document that it exists
You now need to demonstrate:
Depth (did you analyze all six factors?)
Consistency (do your actions match your stated process?)
Contemporaneous documentation (can you prove what you knew at the time?)
Advisor involvement (who influenced what decision?)
From protection to evidence?
The common thread is still a prudent, documented process.
But more precisely:
We are moving from “process as protection” to “process as evidence.”
And that is a meaningful escalation.
The Parting Glass
What I am discussing with my plans sponsors:
The safest plans are not the cheapest, nor the best performing
The safest plans are the ones that can reconstruct their decision-making in detail under scrutiny
Documentation is no longer administrative—it is legal defense
And candidly, advisors are more valuable—not less.
Because most sponsors:
Will not operationalize the six-factor framework properly
Will not document at the level now implicitly required
Will not connect decisions back to fiduciary rationale