What the DOL’s safe harbor proposal could mean for retirement plans

What advisors should know

The U.S. Department of Labor (DOL) has proposed a new rule aimed at modernizing retirement plan investment lineups and expanding access to a broader set of investment opportunities—including private market strategies. For advisors, the proposal represents an important step toward clarifying fiduciary responsibilities while supporting innovation in DC plans.
The DOL is currently reviewing comments on the proposal, with a final rule anticipated to be released in the coming months. BlackRock’s perspective, outlined in this comment letter, is supportive of the proposal’s direction—with targeted recommendations to ensure the final rule strengthens fiduciary confidence without limiting flexibility. BlackRock will provide updates if and when the proposed rule is finalized.

What the DOL proposal seeks to do

At its core, the proposal introduces a process-based safe harbor under the Employee Retirement Income Security Act of 1974 (ERISA). If fiduciaries follow a well-defined, prudent evaluation process when selecting investment options, they can be presumed to meet their duty of prudence.

This framework is:

• Asset-neutral, meaning it does not favor or exclude specific asset classes.
• Principles-based, allowing fiduciaries to apply judgment rather than follow rigid rules.
• Inclusive of alternatives, including asset allocation strategies that incorporate private market exposures.

For advisors, it could provide an opportunity to help clients thoughtfully integrate new sources of return, diversification and long-term value through a disciplined fiduciary process.

The six-factor framework: A structured approach to prudence

The proposed framework is built around six factors that fiduciaries must evaluate when selecting investment options:

1. Performance: Assess expected risk-adjusted returns over an appropriate time horizon.
2. Fees: Evaluate costs in the context of value delivered, not simply selecting the lowest-cost option.
3. Liquidity: Determine that investments can meet participant and plan-level needs.
4. Valuation: Confirm investments can be valued accurately and in a timely manner.
5. Benchmarks: Compare investments against meaningful benchmarks.
6. Complexity: Determine whether the fiduciary has the expertise to evaluate the investment or needs support.

This framework is designed to help fiduciaries make objective, analytical, and well-documented decisions, which is particularly important when considering newer or less traditional investment structures.

BlackRock’s view: A strong foundation, with room to refine

BlackRock supports the proposal’s overall approach, especially its emphasis on flexibility and fiduciary judgment. BlackRock’s recommendations focus on ensuring the final rule remains practical, asset-neutral and supportive of innovation.

Key priorities include:

Preserve fiduciary discretion
The proposal should reinforce that fiduciaries’ reasonable judgment deserves regard, particularly when determining comparable investments or evaluating performance metrics.

Avoid unintended bias against certain structures
Some of the illustrative examples rely heavily on frameworks designed for mutual funds. BlackRock recommends ensuring the rule remains truly asset-neutral and accommodates other vehicles—such as collective investment trusts (CITs)—and alternative strategies.

Clarify that examples are illustrative—not requirements
The proposal includes examples to guide fiduciaries. The DOL should clarify that they do not impose additional or prescriptive conditions. Maintaining flexibility is critical to ensuring the safe harbor works across diverse plan designs.

Support innovation and new investment strategies
The final rule should provide fiduciaries with guidance on how to evaluate new or innovative products, including those without long performance histories.

Align with existing regulatory frameworks
To avoid confusion and duplication, the rule should better align with existing standards for valuation, liquidity, and governance—promoting consistency across regulatory regimes.

What should advisors do now?

To prepare, fiduciaries can begin considering how the proposed safe harbor could affect retirement plan governance, employee benefits decision-making and investment menu reviews.

• Expanded opportunity set: Greater clarity may enable increased access to lifetime income, private markets and diversified sources of return.
• Improved participant outcomes: Broader investment options can help enhance long-term, risk-adjusted retirement outcomes.
• Greater fiduciary confidence: A clear, process-driven framework can reduce uncertainty and support decision-making.
• Continued flexibility: With the right refinements, fiduciaries can incorporate innovation while maintaining prudent oversight.

The bottom line

The DOL’s proposed safe harbor represents an important step toward modernizing retirement plan investment lineups. By providing clearer guidance while preserving fiduciary judgment, the rule has the potential to unlock broader access to investment opportunities—including lifetime income and private markets—within DC plans.
BlackRock supports this direction and encourages targeted refinements to ensure the final rule promotes flexibility, reduces unintended constraints, and ultimately strengthens retirement outcomes for participants.