Daniel Aronowitz Confirmed as Head of Department of Labor's EBSA

The nomination of Daniel Aronowitz to head the Employee Benefits Security Administration (EBSA) in the Department of Labor (DOL) has been confirmed by the US Senate. Aronowitz was until recently the president of Encore Fiduciary (formerly Euclid Fiduciary). The company provides fiduciary insurance, fidelity bonds, cybersecurity insurance, and fiduciary insurance consulting. He is the author of the Fiduciary Liability Insurance Handbook. The book’s only mention of ESOPs is to say that this kind of fiduciary insurance is more costly than that needed for other retirement plans.

At Aronowitz’s June 5, 2025, confirmation hearing (the segment with Aronowitz starts at 35:30 in the video), Alaska Republican Senator Lisa Murkowski noted that Aronowitz was “probably very familiar with the angst that has been expressed by some that ESOPs have been operating under a patchwork of litigation and there has been a need for a single clear regulatory definition of good-faith effort of valuation of ESOP stock.” Aronowitz replied, "I believe that Congress wants ESOPs, and everybody is for ESOPs except for the DOL for the last 20 years. I will end the war on ESOPs. I think it's the best way for employees to get an additional benefit and ownership in an American company. The valuation companies have all been sued by the DOL. . . . it can't be right that every single one of them is doing it wrong. What the Department is doing is nitpicking the professional judgment of the valuation professionals. I'm going to put an end to that. Because I think unless there is a clear conflict of interest, then the valuation is appropriate when done by an independent valuation firm."

More broadly, Aronowitz said EBSA will “end the practice of open-ended investigations that go on for years. We will end the bias against ESOPs and other legitimate ways to expand retirement benefits and ownership to America’s workers. And we will end the regulatory abuse of common-interest agreements with plaintiff lawyers. EBSA’s enforcement will be fair, even-handed, and efficient. . . . We will restore discretion to plan fiduciaries as Congress intended in the ERISA statute so that fiduciaries, not the government or plaintiff lawyers, decide what is best for plan participants.”

in recent years, both the number of investigations and the number of lawsuits initiated by the DOL have declined significantly, as described in our ESOP and 401(k) Plan Employer Stock Litigation Review 1990–2025. The proposed valuation regulations that were issued in December 2024 and later withdrawn, however, would have created some significant problems for ESOP transactions. The DOL's latest regulatory agenda indicates that valuation regulations could come as soon as January 2026.