As the third quarter of 2026 begins, retirement plan fiduciaries are working through the most consequential investment-policy development in years: The Department of Labor’s proposed framework for evaluating investment selection in defined contribution (DC) plans. The proposal drew more than 40,000 public comments before the window closed July 1, and it has reignited the long-running debate over alternative investments in DC plans. But the headline misses the point. The proposal’s real emphasis falls not on what committees invest in, but on the prudence and documentation of the fiduciary process itself.

That theme runs through nearly every development worth tracking right now. Plan sponsors are simultaneously confronting heightened cybersecurity and distribution-fraud risk, the operational demands of SECURE 2.0’s Roth catch-up requirements, and an ERISA litigation environment increasingly focused on process and meaningful benchmarking. Across all of it, one principle holds: A well-documented, consistently followed fiduciary process remains the most durable defense a plan sponsor has.

Here are the developments most relevant to strengthening your governance framework heading into the back half of the year.

The Department of Labor’s proposed investment-selection framework

In March 2026, the US Department of Labor (DOL) proposed a process-based safe-harbor framework for selecting designated investment alternatives. The framework would create a “presumption of prudence” for committees that evaluate and document a defined set of factors like expected return, risk, fees, liquidity, valuation, diversification, and participant considerations when making investment decisions.

Much of the public attention has centered on alternatives, but that conversation deserves context. This is not about handing participants direct access to private equity. It centers on limited allocations to private equity, private credit, and real assets inside professionally managed vehicles such as target date funds and multi-asset portfolios. Sponsors remain fully in control; using alternatives stays optional and entirely at the sponsor’s discretion.

The more important takeaway applies whether or not a plan ever adopts alternatives. The proposal reinforces a long-standing truth: The quality of the committee’s review and documentation often matters more than the decision itself. This is a natural moment to revisit committee education; due diligence on fees, valuation, and liquidity; the Investment Policy Statement and your selection criteria; and your ongoing monitoring procedures regardless of where your menu stands today.

Governance risks hiding in plain sight

Three operational issues continue to expose plans in ways that are easy to overlook until they surface at the worst possible time:

  • Beneficiary designations. Outdated or missing designations tend to come to light during difficult life events, where they can delay distributions and trigger competing claims among family members. A simple beneficiary-awareness campaign reduces risk for participants’ families and administrative burden for the plan and results in a low-cost step with an outsize payoff.
  • Participant data and how it’s used. Recordkeepers increasingly run wealth management, managed-account, rollover, and retirement-income businesses alongside plan administration. That convergence raises real fiduciary questions: How is participant data being used, and do participant communications promote the provider’s proprietary solutions over balanced, objective education? Committees should understand what they’re agreeing to.
  • Cybersecurity and distribution fraud. Account takeovers and fraudulent distribution requests continue to target retirement accounts. This has moved well beyond an IT concern and squarely into governance. Committees should expect periodic vendor reporting, strong authentication and distribution controls, and a documented incident-response plan.

What regulators are watching

The enforcement agenda for DOL’s Employee Benefits Security Administration in the 2026 fiscal year centers on cybersecurity, distribution fraud, participant protections, timely deposits, eligibility administration, fee reasonableness, and service-provider oversight. Even for plans that are never investigated, that list functions as a practical governance road map and a clear signal of where regulators believe fiduciary attention belongs.

The litigation landscape

ERISA litigation remains elevated, with filings rising again in early 2026. Recordkeeping-fee and investment-performance claims (frequently targeting target-date funds) still dominate the docket, but courts continue to emphasize process over outcomes. The question is rarely whether an investment underperformed; it’s whether the committee followed a prudent, documented process.

Cybersecurity and distribution claims remain limited relative to fee cases but are trending upward. Plaintiffs, regulators, and insurers increasingly expect fiduciaries to understand account-protection controls and the division of responsibility with their vendors.

Benchmarking is also drawing sharper scrutiny: In Anderson v. Intel (now under Supreme Court review) and Johnson v. Parker-Hannifin Corp., courts examined whether performance comparisons were truly apples to apples. That principle aligns directly with the DOL’s proposed investment-selection framework and only grows more important as menus add alternatives and other less-comparable strategies.

The connective tissue across the DOL proposal, the enforcement priorities, and the litigation trends is the same: process and documentation. Committees that evaluate decisions consistently, apply meaningful benchmarks, and record their reasoning are far better positioned, whether the issue is an investment choice, a cybersecurity incident, or a fee challenge. As the regulatory and legal landscape sharpens its focus on process, that discipline is the most reliable protection a plan sponsor can build. Learn more about our Retirement Plan Consulting capabilities and how we can help.

Cerity Partners Retirement Plan Advisors LLC, d/b/a Cerity Partners Retirement Plan Consultants and Cerity Partners Institutional Consulting (“RPA,” “RPC,” “CPIC,” or “the Adviser”), is an SEC-registered investment adviser and a wholly-owned subsidiary of Cerity Partners LLC. Registration as an investment adviser does not imply any level of skill or training.

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