EBSA bulletin resets ESOP enforcement priorities

The Employee Benefits Security Administration issued Field Assistance Bulletin No. 2026-01 on April 14. Groom Law's Benefits Brief, circulated April 16, describes the guidance as rejecting enforcement practices that many in the ESOP community had long viewed as abusive.

The bulletin abandons those practices and replaces them with instructions for EBSA investigators and staff. The instructions apply to all employee benefit plans, but Groom's brief singles out ESOP fiduciaries, sponsors, and service providers as the parties with the most at stake.

The bulletin is one piece of a broader policy shift that spans Congress and the Labor Department. On Capitol Hill, pending legislation would end EBSA's secret common interest agreements, stop investigations from dragging on indefinitely, and overturn the pro-plaintiff pleading standard the Supreme Court set in Cunningham v. Cornell University.

The Labor Department has been moving the same way. It removed ESOPs from the national enforcement project list, proposed a safe harbor for alternative investment options in retirement plans, and is preparing a regulation on "adequate consideration," the exemption that governs ESOP stock purchase transactions.

The bulletin, the pending bill, and the planned rule each land at a different point in the process, and together they narrow the grounds for contesting an ESOP transaction. The FAB tells EBSA how to open a case and what to demand once it is open. The legislation would cap a case's duration and make a prohibited-transaction claim face an early motion to dismiss. The rule will state what a fiduciary has to prove when a plan buys employer stock.

The immediate picture for fiduciaries is friendlier, and the private bar should see fewer agency-triggered ESOP disputes. But the bulletin changes the posture of investigations, not the standard of proof. The adequate-consideration rule, still in the works, will settle what a fiduciary must show on price and process.