Lisa Gomez Expects Fiduciary and ESG Rules to Face Reversals in 2nd Trump Administration

Assistant Secretary of Labor Lisa Gomez predicted changes to retirement security regulations and standards under the incoming Trump administration, changes likely to reshape key policies on retirement plan investing and environmental, social and governance guidelines.

In a public conversation on Tuesday at the PLANADVISER 360 conference in Scottsdale, Arizona, Gomez acknowledged that the Department of Labor’s retirement security rule, which clarifies when financial professionals are fiduciaries while advising retirement plan participants, may not align with the new administration’s priorities.

“[A rule that leads to more] litigation was not the favorite rule of many people associated with the incoming administration,” Gomez said, acknowledging that adjustments in fiduciary obligations could be early targets for change.

In identifying likely shifts in policy, Gomez also pointed to the DOL’s rule on prudence and loyalty in selecting plan investments, otherwise known as the ESG rule, which permits plan sponsors to consider sustainability factors when advising on retirement plan investments. The rule has faced criticism and legal challenges, which Gomez partially attributes to its ESG branding.

“Maybe if we didn’t call it the ESG rule, it wouldn’t be under such attack,” she noted. Despite the controversy, Gomez affirmed her belief in the rule’s importance, though she acknowledged that the new administration could pull back on ESG-related regulation and enforcement.

Speaking with Jania Stout, the president of retirement and wellness at Prime Capital Financial, Gomez said she plans to step down from her role on January 20, joking at the event that she was on her “farewell tour.”

Reflecting on her time in office, she expressed pride in the DOL’s accomplishments and noted her intent to brief her successor on departmental priorities, emphasizing “protecting participants and continuing to make this agency something that is really in partnership with the stakeholder community.”

Given the political shift and the incoming administration’s control of the Senate, Gomez expects a swift confirmation process for her replacement, contrasting her experience of a delayed confirmation.

SECURE Legacy

Discussing the broader impact of the SECURE 2.0 Act of 2022, Gomez noted that the primary goals of the legislation—enhancing retirement savings and security—could face hurdles if the focus on implementation and rulemaking wanes. SECURE 2.0 encourages retirement savings through measures like emergency savings accounts, designed to help participants manage financial disruptions without tapping into their 401(k)s or 403(b)s. Yet uptake by plan sponsors remains slow, potentially due to concerns about penalties and limited access to emergency savings.

“I think we need to give some time for these provisions to take effect,” Gomez suggested, emphasizing that further iterations, including a potential SECURE 3.0, should address why many workers still hesitate to save for retirement. One proposed action could involve eliminating administrative and financial obstacles that deter individuals from contributing to retirement plans.

Reflecting on ongoing challenges, Gomez urged a deeper focus on the barriers preventing Americans from saving for retirement.

“Are we just trying to accomplish having a retirement system where it’s out there, and if you like to save, you have an option to do it, versus really trying to figure out why people aren’t doing that?” she asked, suggesting that future reforms should address the financial insecurities that discourage consistent contributions.

While Gomez expressed some optimism for the future of retirement policy, her comments underscored the challenges of sustaining momentum during a major political transition. For now, the DOL’s regulatory agenda on the fiduciary duties of advisers and other financial professionals, along with ESG considerations remains in flux, awaiting clarification—and potentially redirection—under a new administration.