With a new administration coming into office this week, several changes to retirement policy can be anticipated, while other efforts initiated or advanced during President Joe Biden’s administration will likely stagnate, according to speakers at T. Rowe Price’s Retirement Market Outlook webinar last Wednesday. 

Aliya Robinson, managing legal counsel of the legislative and regulatory affairs division at T. Rowe Price, said a major policy theme in 2025 will be that “the more things change, the more they will stay the same.” 

“We have a new administration, but [one] with a [new president] that has previously served, so we have experience and knowledge of his policy priorities,” Robinson said. “We have moved from a divided Congress to a Republican-controlled Congress. However, the majorities are so slim that bipartisan negotiation and compromise will still be necessary.” 

Robinson noted that the leadership in congressional committees that have jurisdiction over retirement plans, also known as the “Big Eight,” is retaining six of leaders from the last Congress, and the two new members are lawmakers who have previously been involved in retirement issues.  

In campaigning, President-elect Donald Trump made tax reform a priority, as he did in his previous administration, and he is expected to not only maintain his previous tax cuts, but to extend them. Robinson said she expects the retirement industry to be impacted by the tax cuts as the government looks for revenue-raisers to offset the revenue lost by the cuts.  

One of the likely revenue-raisers is more Rothification of retirement assets. Increasing mandatory Roth (after-tax) deferrals was discussed significantly in the 2017 tax debate until Trump declared that there would be no change to 401(k)s. 

Another revenue-raiser could be the elimination of nonqualified deferred compensation arrangements. Robinson said a provision related to this change dropped out of 2017 legislation at the last minute, but given the amount of consideration it received, she expects it to again be part of discussions about raising revenue . 

“We cannot completely write off Democratic proposals, because this Republican Party has a more populous bent and may be open to eliminating loopholes for the wealthy in order to provide additional tax cuts for the middle class,” Robinson said. 

Because the SECURE 2.0 Act of 2022 was a bipartisan bill, Robinson does not expect a partisan disruption—with the exception of the Saver’s Credit, which provides a retirement contribution from the federal government to help low- and moderate-income workers save for retirement. The provision, which SECURE 2.0 made effective for tax years beginning after 2026, was a priority for the Biden administration, but Robinson said she does not see this being a priority for Trump’s administration.  

“It won’t be pulled back, but don’t expect the Trump administration to be as front-footed about this provision as we have seen under Biden,” she said. 

With Department of Labor regulatory items, like the Retirement Security Rule (commonly called the fiduciary rule) and the rule allowing environmental, social and governance factors to be considered when selecting retirement plan investments, T. Rowe Price expects both to revert back to the versions in place during the previous Trump administration.  

Litigation in 2024 stayed the fiduciary rule from taking effect, and the ESG rule was expected to get another court hearing as well. It is expected that under Trump, the DOL will not defend either rule, both of which were created during Biden’s tenure. 

More Innovation in Retirement Plans 

Robinson added that there is a lot of excitement and buzz around the use of private investments and cryptocurrency in retirement plans, as both the administration and Republicans in Congress have expressed support for expanding these investments. However, she said there is still a lot of education to be done, both in Congress and in federal agencies, so she expects small changes rather than large, immediate shifts of the asset classes into retirement plan investment offerings. 

In 2022, a DOL official reported “grave concerns” about an investment offering from Fidelity that included bitcoin as an investment for inclusion in 401(k) plans.  

Robinson said the good news is that members of Congress have repeatedly stated that they want retirement issues to remain bipartisan, and there are two issues on which they are focused.  

The first is increasing retirement coverage and bringing more people into the system. To do so, Robinson said Congress is looking at everything from requiring every employer to have a 401(k) plan to more technical ideas like moving to 18 from 21 the age at which employers must permit most employees to participate in a retirement plan.  

Congress is also focused on the issue of retirement income, and Robinson said she expects to see legislative provisions in the near future encourage the use of retirement income products inside retirement plans.  

Jessica Sclafani, a global retirement strategist at T. Rowe Price, noted earlier in the webinar that advisers and consultants now report that 18% of their clients offer a retirement income solution, compared with 8% in 2021, demonstrating increased interest from plan sponsors in offering some sort of retirement income solution. 

Litigation Environment 

Beyond policy changes expected in 2025, there are also some lawsuits that plan sponsors should keep on their radar. 

In particular, the recent American Airlines Inc. decision has the potential to set a precedent for evaluating investments on environmental, social and governance reasons. A federal court in Texas ruled on January 10 that the company and its employee benefits committee violated their fiduciary duty of loyalty under the Employee Retirement Income Security Act by prioritizing environmental, social and governance investment goals ahead of the financial interests of their employees’ retirement plans. 

Robinson called the case nuanced and said it is less about ESG funds and more about the activity of American Airlines and BlackRock and how their corporate commitments to ESG spilled over into their retirement plan activity—particularly to proxy voting. 

“What the case offers is an opportunity for [employers] to review their current practices, particularly around proxy voting, and making sure they’re following their own internal guidelines,” Robinson said. “It’s also an opportunity for those fiduciaries within the plan that are holding multiple hats to really make sure that when [they] are talking about ERISA issues, that [they] are staying in that ERISA zone and not bringing in non-ERISA issues.” 

ERISA litigation reform is also an issue that will come to a head this week when the U.S. Supreme Court hears oral arguments in Cunningham v. Cornell University. The Supreme Court will determine whether claiming a “prohibited transaction” against an ERISA plan is a sufficient argument to survive a motion to dismiss in court.  

In general, Robinson said Republicans have been very supportive of litigation reform, especially on ERISA class actions.  

“[With] these lawsuits that are just driving toward settlement dollars and not trying to improve the system, we think we can get a lot of support in this Congress for [eliminating] that,” Robinson said.