Field Assistance Bulletin 2026-01 and the 88%: What the ERISA Bar Missed
FAB 2026-01 has generated substantial commentary from the ERISA bar. Proskauer, National Law Review, ASPPA-Net, PSCA, and others all covered it within 48 hours. The analysis has been thorough and professional, but it has also been written entirely for large plan clients.
The Am Law 100 is the annual ranking of the 100 highest-grossing law firms in the United States. The firms on that list that cover ERISA serve Fortune 500 companies, institutional fiduciaries, and large multiemployer funds. Their clients have compliance departments, outside ERISA counsel, and annual audit requirements. For those clients the FAB raises questions about ESG documentation, fiduciary process records, and ESOP valuation timelines, but that is a small fraction of the total plans in the retirement market.
88% of all retirement plans in the United States have fewer than 100 participants. The majority of the remaining 12% fall in the 100 to 499 participant range. The plans generating that commentary represent a narrow slice of a market with 836,000 plans in it. The two words in FAB 2026-01 most relevant to small plans — loyalty and egregious — appear in none of that analysis in this context.
Loyalty means acting for the exclusive purpose of providing benefits to participants. An advisor whose compensation grows automatically as plan assets increase, without any corresponding increase in services and without an invoice describing what was purchased, is not acting for the exclusive purpose of providing benefits to participants. That compensation structure serves the advisor's interests. EBSA has now named loyalty breach as its highest civil enforcement priority.
Egregious in the small plan market does not require outright theft. It describes something quieter and more pervasive. A plan sponsor paying asset-based advisor compensation that has grown automatically for years with no corresponding increase in services, no invoice, no defined scope of work, and no moment where the cost was ever evaluated or justified. An advisor with no economic incentive to call, benchmark, renegotiate, or recommend that fees be paid at the employer level rather than drawn from participant accounts. A plan sponsor with no information suggesting anything is wrong. That is the typical small plan experience. Asset-based compensation that serves the advisor rather than participants is exactly what EBSA's loyalty standard is designed to address.
One additional point from my previous post: the fidelity bond violations FAB 2026-01 names as a new enforcement priority are almost exclusively a small plan problem. Large plans have the infrastructure to catch them. That enforcement priority, like loyalty and egregious, points directly at the market the published commentary ignores.
EBSA said publicly last week that even 1,000 additional investigators would not be enough and that strategic enforcement is the only viable path. The small plan market is where to look.