ICYMI: Josh Hammer: Trump Smashes Trial Lawyer Cabal with New 401(k) Reforms

“This is vintage Trumpism: Taking on the Washington bureaucracy and a rigged legal system on behalf of everyday American 401(k) savers. It’s what Trump has long campaigned on, and it’s how his legacy will one day be remembered. This new Department of Labor reform has the potential to finally democratize access to the same types of wealth-building investments that Wall Street elites, big university and foundation endowments, and public pensions have long had all to themselves.” — Josh Hammer, Newsweek Senior Editor-at-large, Host of “The Josh Hammer Show”

Trump Smashes Trial Lawyer Cabal with New 401(k) Reforms

By Josh Hammer

Newsweek

March 31, 2026

America’s retirement savings system has been frozen in place for the past 20 years, leaving workers with limited options for growing their nest eggs even as innovation transformed the investing landscape. The reason? A cabal of trial lawyers and Washington bureaucrats who have weaponized the Employee Retirement Income Security Act of 1974 (ERISA) into a litigation minefield.

Over the past decade, trial lawyers created a $1 billion-plus industry by filing more than 600 class-action lawsuits targeting retirement plan sponsors and fiduciaries over what largely amount to technicalities: fee disclosures, “excessive” costs, obscure process flaws. Many of these are actually thinly veiled shakedowns designed to extract hundreds of millions in fee settlements for the lawyers involved. Their lawfare spread mass fear among employers and retirement plans, deterring them from offering newer and more innovative investment options to the workers they serve.

Worse, these lawyers take pride in their profiteering. President Trump’s August 2025 executive order (EO) aims to end this by providing legal safe harbors and clarifying rules for including alternative assets in 401(k)s, easing the fear of litigation these lawyers exploit. Trial attorney Jerry Schlichter, who was recently profiled by Bloomberg and described by The New York Times as the “pioneer in suing employers over retirement plans,” has secured more than $750 million in settlements from such lawsuits. Another prominent player, Mark Boyko, responded to President Trump’s EO by saying, “I would joke and say that I hope employers add alternative investments, because I have some kids I need to put through college.”

This week, President Trump has formally started the process of smashing this cabal, giving American workers the freedom, flexibility, and options they deserve in saving for their own retirements through 401(k)s. Following through on last summer’s EO, President Trump’s Department of Labor just released a rule providing legal safe harbors for fiduciaries who follow prudent steps, protecting them from the trial bar’s invariably meritless claims. 

This is vintage Trumpism: Taking on the Washington bureaucracy and a rigged legal system on behalf of everyday American 401(k) savers. It’s what Trump has long campaigned on, and it’s how his legacy will one day be remembered. This new Department of Labor reform has the potential to finally democratize access to the same types of wealth-building investments that Wall Street elites, big university and foundation endowments, and public pensions have long had all to themselves.

There hasn’t been a real innovation for 401(k) savers in two decades: Back then, it was auto-enrollment into target-date funds, a simple, set-it-and-forget-it way to build a diversified portfolio. Think about it: George W. Bush was president, flip phones were all the rage, and Netflix was still mailing DVDs. Today, we’re awash in innovation—streaming TV, buying crypto, and investing in the market right from your iPhone.

Yet the 90 million private-sector workers saving for retirement through 401(k)s are still limited to the same menu of investment options they had back in 2006: for the most part, passive index funds that just track the S&P 500. There have been no real breakthroughs that diversify our holdings or offer the potential of higher risk-adjusted returns. Americans are living longer and are far less likely to have traditional defined-benefit pensions, but the private-sector retirement system has basically stood still.

Why? Simple. It’s regulatory capture at its ugliest—all while elites play by manifestly different rules. Wealthy investors, major foundations, and endowments of Ivy League universities have quietly made billions using alternative asset classes that deliver long-term returns and provide insulation from public-market downturns. The big public pension funds do the same. These investments are proven tools for portfolio diversification and growth. 

Yet everyday Americans have been locked out and instead funneled into index funds that are almost completely dependent on the stock prices of the so-called “Magnificent 7” tech giants (Apple, Microsoft, Amazon, Google, NVIDIA, Meta, and Tesla). These companies alone accounted for 33% of the S&P 500’s value in February 2026. 

The concentration of retirement savings in Big Tech, which in recent years has so often pushed a liberal political agenda, ought to be of significant concern. And because 87% of U.S. companies are private today (up from 62% in 2002), they have been effectively off-limits to normal Americans’ 401(k)s. This means that a tech sector dip translates into a disproportionate hit to mom-and-pop retirement savings.

Until now. President Trump’s bold new 401(k) reforms begin to address these risks. 

By smashing the ERISA-weaponizing trial bar cabal, Trump is freeing American savers from a paternalistic attitude that says “Washington knows best”—and private-market investments are too complex for average Americans to understand, to boot. In reality, alternative investments can provide real diversification for investors’ portfolios; that’s precisely why Wall Street elites have increasingly turned to them over the years.

President Trump is empowering workers by tearing down the barriers of lawsuit-happy litigators, allowing market forces to drive better outcomes. After years of 401(k) stagnation enforced by trial bar shakedowns, it’s time to innovate again. Retirement should be made great again, and Trump has now taken a big step toward doing just that.

Josh Hammer is Newsweek senior editor-at-large, host of “The Josh Hammer Show,” a Shillman Fellow at the David Horowitz Freedom Center, and author of Israel and Civilization: The Fate of the Jewish Nation and the Destiny of the West (Radius Book Group). X: @josh_hammer.

The views expressed in this article are the writer’s own.