What Is a Regulatory Impact Analysis for a DOL 401(k) Rule?

A regulatory impact analysis models what DOL expects a rule to do. It does not tell a 401(k) plan what the rule legally requires.

That distinction matters because an RIA can be the longest, most quantitative part of a major rulemaking.

It may contain:

• cost estimates
• cost savings
• benefits
• transfers
• affected-plan counts
• behavioral assumptions
• litigation estimates
• market assumptions
• discount rates
• uncertainty
• alternatives.

Those numbers can look more concrete than the regulatory text.

They are not more legally authoritative.

The legal requirements come from the statute and the agency's valid regulatory action.

The economic analysis explains the agency's case for choosing that action.

What Is an RIA Supposed to Answer?

At its best, the analysis answers five hard questions.

1. What problem exists without the rule?
2. What changes because of the rule?
3. Who bears costs or receives benefits?
4. What alternatives could achieve the objective?
5. How uncertain are the estimates?

Executive Order 12866 directs agencies to assess costs and benefits of available regulatory alternatives for significant actions.^[2]

OMB Circular A-4 provides the government's core analytical framework for regulatory analysis.^[1]

For a major EBSA action, the RIA becomes the bridge between:

policy rationale

and:

estimated real-world consequences.

It is analysis, not codified law.

Start With the Regulatory Baseline

The baseline is the world against which DOL measures the rule.

That sounds technical.

It determines the answer.

Suppose current 401(k) fiduciaries already spend substantial time reviewing investment menus because of:

• ERISA duties
• litigation risk
• insurance underwriting
• existing practices.

A new rule standardizes that work.

If DOL assumes much of the current activity becomes unnecessary, the rule can produce:

cost savings.

If an analyst assumes the activity would have disappeared anyway, the same rule produces less savings.

Neither estimate can be understood without the baseline.

The Baseline Is Not "Do Nothing"

A regulatory baseline usually includes what would happen if the agency does not issue the new action.

That can include:

• current statutes
• current regulations
• existing market practice
• expected trends
• litigation
• other government actions already in force.

For 401(k) rules, the baseline can be especially difficult because sponsor behavior is partly driven by:

• legal requirements
• fiduciary risk management
• service-provider practices
• private litigation.

The RIA has to decide which activity is caused by current law and which activity the new rule would change.

That judgment can move the cost estimate by millions or billions of dollars.

Costs, Cost Savings, Benefits and Transfers Are Not Synonyms

These terms answer different questions.

Cost

Resources society uses because of the rule.

Example:

a service provider spends staff time collecting new information.

Cost savings

Resources no longer used because the rule removes or simplifies an existing burden.

Example:

a fiduciary spends less time on duplicative legal review.

Benefit

An improvement in welfare produced by the rule.

Example:

better investment decisions or lower litigation friction.

Transfer

Money changes hands without necessarily changing total social resources.

Example:

a fee shifts from one party to another.

A transfer can matter greatly to the parties.

It is not automatically a net social benefit.

The 2026 Alternative-Investments Proposal Makes This Concrete

DOL's March 31, 2026 designated-investment-alternatives proposal contains a large RIA.^[5]

OMB determined the proposal was economically significant under Executive Order 12866.^[5][6]

DOL analyzed effects involving:

• plan fiduciary process
• litigation risk
• investment-menu design
• alternative-asset access
• service-provider work
• participant outcomes.^[5]

Under Executive Order 14192 accounting, DOL estimated:

perpetual present-value costs: negative $8.1552 billion

and:

annualized costs: negative $570.9 million

in 2024 dollars.^[5]

The minus sign is the point.

Negative Cost Does Not Mean DOL Pays Plans Money

It means DOL modeled:

net regulatory cost savings.

The proposal says an action with total costs below zero is treated as deregulatory for EO 14192 purposes.^[5]

DOL expects the proposal to save plan resources by reducing activities associated with:

• uncertainty
• litigation risk
• defensive compliance practices.^[5]

No plan receives a government transfer of:

$570.9 million.

The number is an economy-wide annualized estimate under the agency's assumptions.

It should never appear in a committee memo as:

"DOL will save this plan $570.9 million."

Where Do Those Savings Come From?

The model depends heavily on how DOL thinks fiduciaries and service providers will respond.

The proposal expects added clarity and a safe harbor to reduce:

• supplementary legal review
• monitoring of litigation
• defensive process costs
• some insurance-related friction.^[5]

The agency also expects the rule to affect available investment products and the use of alternative assets.

Those are behavioral predictions.

They are not facts that have already happened.

If the behavioral response differs, realized savings can differ too.

A Model Can Be Precise and Still Be Uncertain

The presence of a decimal point does not remove uncertainty.

An estimate such as:

$570.9 million

can depend on assumptions about:

• number of affected plans
• wage rates
• hours saved
• safe-harbor adoption
• litigation frequency
• professional-service use
• insurance costs.

Change one major assumption and the estimate can move.

That is normal regulatory analysis.

The right response is not to dismiss the model.

It is to identify the assumptions carrying the result.

DOL Explicitly Asked Commenters to Challenge the RIA

The AC38 proposal invites data that would:

• support
• contradict

the analysis.^[5]

DOL specifically asks about:

• use of ERISA 3(21) and 3(38) fiduciaries
• off-the-shelf plan designs
• litigation
• fiduciary insurance
• alternative-asset adoption
• financial benefits
• unmodeled risks or costs.^[5]

That is important.

The proposal-stage analysis is not presented as untouchable.

The public-comment process is partly a test of the model.

The Agency Admits Important Adoption Uncertainty

DOL says it is uncertain:

• how many plans would adopt alternative assets
• which products would be used
• participant take-up rates
• portfolio allocations.^[5]

It also notes that financial markets can change and that greater flows into alternative assets could affect return characteristics.^[5]

Those admissions are not weaknesses to hide.

They are part of a serious RIA.

A credible model should tell the reader what it does not know.

Affected Entities Are More Complicated Than Plan Count

The AC38 analysis says most participant-directed defined contribution plans could be affected.^[5]

But the mechanism varies.

Large plans may:

• use internal expertise
• hire ERISA counsel
• employ investment advisers.

Smaller plans may rely more heavily on service providers and predesigned investment menus.^[5]

That means one rule can affect:

• plan sponsors
• participants
• service providers
• investment product manufacturers

through different channels.

A single "number of plans" cannot capture the entire economic footprint.

Why Time Horizon Matters

Costs and benefits happen at different times.

Some implementation costs occur once.

Other effects continue annually.

A regulatory analysis may therefore report:

• first-year costs
• recurring annual costs
• present value
• annualized value.

EO 14192 adds its own current accounting framework, including perpetual-horizon treatment for covered regulatory cost accounting.^[3][4][15]

That is why the AC38 number is described as:

perpetual time horizon present value

and:

annualized costs.^[5]

Those are analytical constructs.

They are not dates or compliance obligations.

Annualized Cost Is Not This Year's Invoice

Annualization converts a stream of costs and savings into a comparable yearly amount.

It helps compare actions with different timing.

Suppose a rule has:

• large implementation cost in year one
• savings for the next ten years.

The actual cash flow can be lumpy.

The annualized number smooths the stream mathematically.

A sponsor's actual expense in one year can be very different from the federal annualized estimate.

Why Discounting Matters

A dollar today and a dollar years from now are not treated as economically identical in present-value analysis.

Discounting converts future effects into present-value terms.

The chosen:

• discount rate
• time horizon
• start year

can materially affect results.

This is why a good reader does not quote:

present value = X

without also identifying:

• period
• dollar year
• discounting convention.

These estimates are not portable without their measurement conditions.

Quantified Does Not Mean More Important Than Unquantified

Some effects are difficult to monetize.

For a 401(k) fiduciary rule, those might include:

• reduced uncertainty
• innovation
• investment-menu breadth
• litigation deterrence
• participant confidence
• harder-to-measure market risks.

An agency can discuss those effects qualitatively.

A spreadsheet column with no dollar value does not mean:

zero.

It means:

not reliably monetized.

That distinction is especially important when comparing benefits with compliance costs that are easier to count.

RIA and PRA Are Separate Analyses

The Paperwork Reduction Act focuses on:

collections of information.

That includes burdens created when the government requires or causes regulated parties to:

• disclose
• report
• retain
• provide information.

AC38 has a separate PRA section.^[5][7]

The proposal estimates:

• 23,667 respondents
• 23,667 responses
• 5,917 burden hours
• $0 estimated external cost.^[5]

Those numbers do not replace the RIA.

Why Can PRA Show $0 While the RIA Shows Large Economic Effects?

Because the analyses measure different things.

The PRA estimate focuses on the information collection.

The broader economic model includes effects such as:

• rule review
• professional time
• litigation-related savings
• market behavior
• implementation.

The proposal also estimates roughly:

$1.1 million annually

for service providers to gather and organize information for specified representations, based on an assumption of 15 minutes per plan.^[5]

So a reader who sees:

Estimated Total Costs: $0.00

in the PRA summary and concludes:

"DOL says this rule costs nothing"

has mixed analytical categories.

Burden Hours Are Not Total Economic Costs

This error is common because burden hours are easy to quote.

PRA burden tells the reader how much time is associated with the defined information collection.

It does not necessarily include:

• attorney review
• investment changes
• insurance effects
• litigation effects
• business restructuring
• participant outcomes.

Those belong elsewhere.

For a full economic picture, read:

RIA + PRA + other procedural analyses.

Do not turn one subsection into the entire rule.

The Regulatory Flexibility Analysis Is Different Again

The Regulatory Flexibility Act asks how a proposed rule affects:

• small businesses
• small organizations
• small governmental jurisdictions.^[10]

When required, an Initial Regulatory Flexibility Analysis examines:

• affected small entities
• compliance requirements
• legal basis
• alternatives that could reduce burden.^[10]

AC38 includes an IRFA because DOL expects significant effects on a substantial number of small entities.^[5][8]

That is a narrower population lens than the overall RIA.

Small-Entity Analysis Can Reach Beyond Small Plans

The AC38 IRFA considers small plan service providers too.^[5]

DOL notes that many small plans rely heavily on:

• recordkeepers
• advisers
• other service providers.

A rule can therefore affect small employers indirectly through the firms designing their investment menus.

This matters because:

small plan

and:

small regulated business

are not always the same unit.

The IRFA asks who bears the relevant economic impact.

What Does SBA Office of Advocacy Do?

The Office of Advocacy monitors federal rules for small-business effects under the RFA.^[8][9][10]

For AC38, Advocacy:

• flagged the proposal for small entities
• noted that DOL had prepared an IRFA
• later submitted comments supporting the rule while asking for added clarity to avoid unnecessary burdens.^[8][9]

That comment is useful evidence about small-business concerns.

It is not DOL's final conclusion.

Authorship still matters.

RIA and OIRA Review Are Not the Same Thing

INV-197 covers OIRA.

The relationship is close.

OIRA reviews significant agency drafts under Executive Order 12866.^[2][6]

The RIA is part of the analytical support for that review.

But:

OIRA review is the centralized process.

RIA is the agency's economic analysis.

One is not a synonym for the other.

OIRA can challenge assumptions.

DOL remains the rulemaking agency.

OIRA Clearance Does Not Turn Estimates Into Facts

AC38 concluded OIRA review before publication.^[6]

The public proposal then presented DOL's analysis.^[5]

The conclusion of review does not mean:

OMB guarantees the savings will occur.

It means the draft completed the review process.

The estimate remains an estimate.

Public commenters can still attack:

• baseline
• data
• methodology
• assumptions.

That is exactly what notice-and-comment allows.

Proposal RIA and Final RIA Can Differ

A proposal-stage analysis is based on:

• proposed text
• current evidence
• pre-comment assumptions.

After comments, DOL can:

• narrow the rule
• change conditions
• revise affected counts
• update wage rates
• change adoption assumptions
• revise cost estimates.

The final economic analysis should therefore be read as its own analysis.

Do not assume the proposal's numbers automatically survive finalization.

The 2024 Retirement Security Rule Shows Why Final RIAs Matter

DOL's April 2024 Retirement Security final rule included extensive economic analysis.^[12]

The final package followed:

• proposal
• comments
• public hearing
• revisions.

Its economic analysis addressed costs and benefits across retirement advice markets.^[12]

That was a final-stage agency analysis.

It was still not the source of legal validity.

A Detailed RIA Does Not Immunize a Rule From Court Review

The 2024 Retirement Security Rule was later:

• stayed
• vacated.^[13]

DOL restored the prior fiduciary framework in 2026.^[13]

That sequence matters.

Economic analysis can support the agency's policy justification.

A court can still decide that the rule:

• exceeds statutory authority
• violates the APA
• has another legal defect.

RIA quality and legal validity overlap in some litigation questions.

They are not the same thing.

Can an Old RIA Still Be Useful After Vacatur?

Yes, as historical analysis.

The 2024 analysis may still contain useful information about:

• retirement-advice markets
• estimated compliance behavior
• industry structure
• agency assumptions at that time.

It should be cited as:

DOL's 2024 analysis.

Not:

current fiduciary law.

Historical value survives.

Legal force does not come from the economic model.

The 2016 Fiduciary RIA Shows How Large These Analyses Can Become

DOL's earlier fiduciary investment-advice rulemaking produced a dedicated economic study running hundreds of pages.^[16]

It examined:

• advice-market structure
• conflicts
• investor harm
• costs
• benefits.

That scale shows why major retirement rulemaking can become an economics project as much as a drafting project.

It also makes source discipline more important.

A long analysis can contain useful evidence without being one sentence of operative regulatory text.

AC37 Shows the RIA Before It Is Public

The 2026 Unified Agenda lists the prudence and shareholder-rights project, RIN 1210-AC37, as economically significant.^[14]

Its agenda entry says cost estimates remain under development and will be reflected in the NPRM.^[14]

That tells the reader:

an economic analysis is being built.

It does not provide the finished analysis.

As of the current pending-review stage discussed in INV-197, the public should not invent the missing numbers.

Wait for the published document.

Agency Estimates and Commenter Estimates Should Be Kept Separate

Suppose DOL estimates:

100,000 hours saved.

A trade association estimates:

500,000 hours saved.

A participant group estimates:

net burden increases.

All three can belong in the rulemaking record.

A good article writes:

• DOL estimated...
• Association X argued...
• Commenter Y challenged...

A bad article averages the numbers and calls the result:

the regulatory estimate.

There may be no single agreed number.

Worked Example: Negative $570.9 Million Becomes a Plan Savings Promise

Committee presentation says:

"DOL estimates each plan will save $570.9 million annually."

Wrong.

The figure is an economy-wide annualized regulatory cost estimate under EO 14192 accounting.^[5]

It reflects negative cost:

modeled savings.

It is not:

• per plan
• guaranteed
• cash payment
• current result.

The corrected statement is:

"DOL estimates the proposed rule would produce $570.9 million in annualized net regulatory cost savings under its EO 14192 methodology."

Worked Example: PRA Hours Become the Cost of the Entire Rule

Vendor says:

"The rule requires only 5,917 hours nationwide, so implementation cost is negligible."

The 5,917 hours belong to the defined PRA information collection.^[5]

The broader economic analysis evaluates much more.

The number cannot be used as a complete cost estimate without collapsing separate analyses.

The question should be:

5,917 hours of what?

Measurement scope matters.

Worked Example: DOL's Assumption Becomes a Fiduciary Duty

impact analysis assumes many small plans rely on service providers for investment-menu design.

Compliance memo says:

"DOL requires small plans to outsource investment selection."

No.

That is an analytical assumption about market behavior.

The regulatory text determines what fiduciaries may or must do.

A description of existing practice does not become a mandate merely because the model uses it.

Worked Example: Commenter Data Challenges Litigation Savings

Insurer submits updated evidence showing fiduciary-liability premiums did not fall where DOL expected.

That evidence could matter to the final analysis.

It might cause DOL to:

• lower savings estimates
• change assumptions
• explain why the comment is unpersuasive.

It does not automatically change the proposed regulatory text.

Economic comment and legal amendment are related but separate.

Worked Example: Vacated Rule's analysis Is Treated as Current Law

Analyst cites the 2024 Retirement Security economic analysis to say:

"Current law requires this rollover-advice process."

That is a category error after vacatur.^[13]

The impact analysis can explain the old agency model.

Current fiduciary status must be checked against:

• current 29 CFR 2510.3-21
• current PTE text
• later DOL action
• court decisions.

Historical economics is not current law.

How Should a 401(k) Committee Use an model?

Use it to understand:

• what DOL thinks the problem is
• which entities DOL expects to change behavior
• where DOL sees costs
• where DOL sees savings
• what assumptions could fail
• what market changes DOL expects.

Do not use it as a substitute for:

• regulatory text
• effective date
• current CFR
• fiduciary process.

The analysis is most valuable for:

anticipation and critique.

The rule is what matters for:

legal obligation.

Economic-Analysis Validation Checklist

Before citing a regulatory estimate, verify:

Stage

Is the analysis:

• proposed
• final
• historical?

Baseline

What world is DOL comparing against?

Population

Which plans, firms or participants are affected?

Measure

Is the figure:

• cost
• saving
• benefit
• transfer
• burden hour?

Time

Is it:

• one-time
• annual
• annualized
• present value
• perpetual?

Dollar year

What year's dollars are used?

Assumptions

Which behavioral assumptions drive the estimate?

Uncertainty

What does DOL say it cannot reliably predict?

Comment status

Did commenters challenge the estimate?

Current law

What regulation actually governs now?

Those ten checks stop most analysis numbers from being misquoted.

A Practical Analysis Matrix

The analyses overlap.

They are not interchangeable.

Fast Answers

What is a regulatory impact analysis?

An agency analysis of the expected economic and other consequences of a regulatory action, including costs, benefits, alternatives and uncertainty.

Is the economic analysis part of the CFR?

No.

Does an impact analysis create a fiduciary duty?

No.

What does negative regulatory cost mean?

Usually modeled net cost savings under the applicable accounting framework.

What did DOL estimate for AC38?

Under EO 14192 accounting, DOL estimated negative $8.1552 billion in perpetual present-value costs and negative $570.9 million in annualized costs, in 2024 dollars.^[5]

Does that mean plans receive $570.9 million?

No.

Can commenters challenge the model?

Yes. DOL expressly requested data supporting or contradicting its AC38 estimates.^[5]

What is the regulatory baseline?

The expected world without the new rule, used as the comparison point for measuring impact.

Is PRA burden the same as total regulatory cost?

No.

What PRA burden did AC38 estimate?

23,667 respondents and 5,917 burden hours annually.^[5]

Why does the proposal also contain an IRFA?

Because the Regulatory Flexibility Act requires focused analysis of significant effects on small entities when applicable.^[5][10]

Does OIRA write DOL's economic analysis?

No. DOL is the rulemaking agency; OIRA reviews significant drafts and their analyses.

Can a rule with a detailed analysis still be vacated?

Yes. The 2024 Retirement Security Rule is the direct example.^[12][13]

What is the safest one-sentence rule?

Use the economic analysis to understand DOL's model of consequences; use the regulatory text and current legal sources to determine what a 401(k) plan must do.

Sources & References

1. Office of Management and Budget: Circulars — Circular A-4, Regulatory Analysis — https://www.whitehouse.gov/omb/information-resources/guidance/circulars/
2. The White House / Federal Register: Executive Order 12866 — Regulatory Planning and Review — https://www.federalregister.gov/documents/1993/10/04/93-24585/regulatory-planning-and-review
3. The White House: Executive Order 14192 — Unleashing Prosperity Through Deregulation — https://www.whitehouse.gov/presidential-actions/2025/01/unleashing-prosperity-through-deregulation/
4. Office of Management and Budget: M-25-20 — Guidance Implementing Executive Order 14192 — https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-20-Guidance-Implementing-Section-3-of-Executive-Order-14192-Titled-Unleashing-Prosperity-Through-Deregulation.pdf
5. U.S. Department of Labor — Employee Benefits Security Administration / GovInfo: Fiduciary Duties in Selecting Designated Investment Alternatives — Proposed Rule, 91 FR 16088, March 31, 2026 — https://www.govinfo.gov/content/pkg/FR-2026-03-31/pdf/2026-06178.pdf
6. Office of Information and Regulatory Affairs / Reginfo.gov: OIRA Review — RIN 1210-AC38 — https://www.reginfo.gov/public/do/eoDetails?rrid=1242111
7. Office of Information and Regulatory Affairs / Reginfo.gov: AC38 Information Collection Request — 202603-1210-007 — https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202603-1210-007
8. U.S. Small Business Administration — Office of Advocacy: EBSA Proposed Rule on Fiduciary Duties in Selecting Designated Investment Alternatives — https://advocacy.sba.gov/2026/04/01/ebsa-proposed-rule-on-fiduciary-duties-in-selecting-designated-investment-alternatives/
9. U.S. Small Business Administration — Office of Advocacy: Advocacy Supports EBSA Rule Clarifying Fiduciary Duties — https://advocacy.sba.gov/2026/06/09/advocacy-supports-ebsa-rule-clarifying-fiduciary-duties/
10. U.S. Small Business Administration — Office of Advocacy: Regulatory Flexibility Act — https://advocacy.sba.gov/resources/regulatory-flexibility-act/
11. Legal Information Institute / U.S. Code: 44 U.S.C. §3507 — Public Information Collection Activities — https://www.law.cornell.edu/uscode/text/44/3507
12. U.S. Department of Labor — Employee Benefits Security Administration / GovInfo: Retirement Security Rule — Final Rule, 89 FR 32122, April 25, 2024 — https://www.govinfo.gov/content/pkg/FR-2024-04-25/pdf/FR-2024-04-25.pdf
13. U.S. Department of Labor — Employee Benefits Security Administration: Retirement Security Rule — Court Vacatur Resources — https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/erisa/retirement-security
14. Reginfo.gov — DOL/EBSA: RIN 1210-AC37 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights — https://www.reginfo.gov/public/do/eAgendaViewRule?RIN=1210-AC37&pubId=202510
15. Office of Information and Regulatory Affairs / Reginfo.gov: Executive Order 14192 Regulatory Accounting — https://www.reginfo.gov/public/do/eAgendaEO14192
16. U.S. Department of Labor — Employee Benefits Security Administration: Fiduciary Investment Advice — Regulatory Impact Analysis — https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/completed-rulemaking/1210-ab32-2/ria

Educational Disclaimer

ROIStreet publishes educational content about 401(k) plans, ERISA, Department of Labor rulemaking, regulatory impact analysis, OIRA review, cost-benefit analysis, the Paperwork Reduction Act and the Regulatory Flexibility Act. This article is not legal, fiduciary, tax, investment, economic, regulatory or plan-administration advice. Regulatory impact estimates depend on baselines, assumptions, methodology, time horizons and data that can change during rulemaking. Modeled costs, savings, benefits, transfers and burden hours do not themselves create legal obligations. Current compliance should be verified against operative statutes, published Federal Register actions, current CFR text, valid exemptions, current agency guidance and judicial decisions.

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