President Donald Trump has nominated Daniel Aronowitz to lead the Department of Labor's Employee Benefits Security Administration.
Aronowitz is president of Encore Fiduciary, a fiduciary liability insurance underwriting company.
If confirmed, Aronowitz would replace Lisa M. Gomez, who stepped down at the end of the Biden administration, as assistant secretary for employee benefits security.
The White House has yet to officially announce Aronowitz’s nomination, but it was posted on Congress’ website on Feb. 11.
Aronowitz has 30 years of experience in the professional liability industry as a coverage lawyer and underwriter, according to his Encore Fiduciary biography, and authors a blog highlighting key developments impacting retirement plan fiduciaries.
Of note, his most recent post is about a federal judge’s decision that American Airlines and its retirement plan fiduciaries violated ERISA’s guidelines by putting corporate interests ahead of participants’ interests due to using ESG factors in their investment decision-making.
In his post, Aronowitz said the decision “was wrong and unfair” and “there is no ESG problem in 401(k) plans.”
“The problem is not plan sponsors, who largely avoid ESG,” Aronowitz added. “The problem is from investment managers who have spent years trying to curry favor with climate and other ‘woke’ activists.”
Under the Biden administration, EBSA issued a rule stipulating that retirement plan fiduciaries can consider ESG factors when selecting investments.
The rule was needed, Biden-era DOL officials said, because late in the first Trump administration the department issued a rule stating that plan fiduciaries could not invest in "nonpecuniary" vehicles that sacrifice investment returns or take on additional risk, which triggered a “chilling effect” on ESG consideration.
Biden officials said their rule also makes clear that fiduciaries cannot sacrifice returns or take on additional risk, but the Trump rule, and especially the proposal on which it was based, established a viewpoint that ESG consideration was improper.
The Biden-era ESG rule survived a court challenge in 2023, but the Republican attorneys general who challenged the rule filed an appeal on narrower grounds in January 2024 and the case is before the 5th U.S. Circuit Court of Appeals in New Orleans.
Gomez, EBSA’s most recent leader, said in an interview that she’s happy that the person nominated to replace her is familiar with ERISA plans and understands the challenges plan fiduciaries are facing.
Gomez said she’ll be watching if Aronowitz is confirmed and how he grapples with the Trump administration’s desire to cut regulations — Trump on Jan. 31 signed an executive order requiring federal agencies to repeal at least 10 existing rules or regulations for every new one introduced — with the retirement industry’s need for clear regulations and guidance.
“You want to know what you’re dealing with so you can protect yourself,” Gomez said of plan sponsors.
Investment Company Institute President and CEO Eric J. Pan welcomed Aronowitz’s nomination.
“We are pleased that he is willing to enter public service and bring his keen understanding of the voluntary retirement system and ERISA fiduciary protections to bear at the agency,” Pan said in a statement. “We look forward to his confirmation by the Senate and to working closely with him to support the millions of American investors who save for retirement using funds.”
