DOL Fiduciary Rule Vacated: The Five-Part Test Is Restored
After years of legal battles, the Department of Labor’s 2024 Retirement Security Rule is officially dead. Federal courts in Texas vacated the rule in March 2026, the Trump administration declined to defend it, and on March 20, 2026, the DOL formally removed it from the Code of Federal Regulations. The DOL has also confirmed it has no plans to write a replacement rule. The practical effect is a return to the 1975 five-part test, which has been the standard for determining whether someone qualifies as a fiduciary under ERISA for the past fifty years.
What the 2024 Rule Would Have Done
The 2024 rule would have dramatically expanded who counts as an ERISA fiduciary. Under that rule, a single rollover recommendation could have been enough to trigger fiduciary status, even without any ongoing advisory relationship. Many advisers responded by updating their service agreements, fiduciary acknowledgment letters, and client disclosures to reflect that broader standard. With the rule now gone, those updates reference a legal standard that no longer exists and should be reviewed and revised.
Can We Stop Collecting Rollover Documentation?
We have received a number of questions about whether advisers can stop collecting rollover documentation now that the rule has been vacated. The short answer is that it is complicated, and we do not recommend it at this time.
Under the restored 1975 standard, an adviser is only an ERISA fiduciary if all five of the following are true: (1) the adviser provides investment advice or recommendations; (2) on a regular basis; (3) under a mutual understanding with the client; (4) that the advice will be a primary basis for investment decisions; and (5) that the advice is tailored to the client’s specific needs.
The key words here are “regular basis” and “mutual understanding.” A one-time rollover recommendation to a prospect with no prior advisory relationship generally will not meet this standard. But the analysis changes where an ongoing relationship already exists. An adviser who already serves a retirement plan or its participants is much more likely to qualify as an ERISA fiduciary, meaning rollover recommendations made in that context may still carry full fiduciary obligations.
This makes the practical timing of when a prospect becomes a client a critical issue. For example, if a client signs an advisory agreement before receiving a rollover recommendation, PTE 2020-02 may be required. If the recommendation is made while the person is still a prospect, the exemption may not be needed. The real question is whether advisers want their IARs and support teams making those fact-specific determinations in the field, when they are used to a process that treats all rollover recommendations the same way.
Regardless of where the ERISA analysis lands, the SEC’s fiduciary standards still apply to rollover recommendations under the Investment Advisers Act. The SEC expects advisers to have a reasonable basis to believe that both the rollover itself and the destination account are in the client’s best interest, and it expects that analysis to be documented.
Finally, this may not be the DOL’s last word on the subject. The DOL’s regulatory agenda indicates that further changes are possible in 2026, so we recommend advisers continue collecting rollover documentation until additional guidance is provided.
Watch Your Agreement Language
If your advisory agreements were updated in 2024 or 2025 to acknowledge fiduciary status under the now-vacated rule, those provisions could be holding you to a standard the law no longer requires. A contractual fiduciary acknowledgment is enforceable even when the underlying regulation no longer exists, meaning your agreement itself becomes the source of your liability. Advisers should review and, where appropriate, revise those provisions. It is also worth noting that the DOL has declared the entire preamble to PTE 2020-02 “no longer reliable.” The exemption itself remains in effect, but the interpretive guidance that accompanied it is gone, creating some uncertainty about its scope.
Takeaways
- The DOL’s 2024 Retirement Security Rule has been formally vacated. The 1975 five-part testis once again the standard for ERISA fiduciary status.
- Most rollover recommendations made by investment advisers who already have an ongoing relationship with a plan or participant will still satisfy the five-part test. The vacatur does not eliminate rollover compliance obligations in those situations.
- We recommend keeping rollover documentation procedures and processes in place. SEC fiduciary obligations apply to rollover recommendations regardless of ERISA status, and thorough best-interest documentation remains best practice.
- Review any advisory or service agreements updated in 2024 or 2025 to reflect the vacated rule. Provisions acknowledging fiduciary status for one-time or rollover advice may now be creating obligations beyond what the law requires.