Labor & Employment Law Daily Wrap Up, DOL NEWS—EBSA backpedals advisory opinion on Citigroup’s race-based retirement benefit, (Aug 5, 2025)

By Patricia K. Ruiz, J.D.

The DOL said that, previously, it wrongly assumed Citi’s Action for Racial Equity Asset Manager Program was lawful.

The Department of Labor (DOL) rescinded Advisory Opinion 2023-01A, issued September 29, 2023, regarding the application of certain fiduciary responsibility provisions of Title I of the Employee Retirement Income Security Act (ERISA) to Citigroup Inc.’s Action for Racial Equity Asset Manager Program. The DOL stated in Advisory Opinion 2025-01A that the previous opinion no longer reflects the views of the DOL.

Under the Racial Equity Program, Citi pays “all or some” of the investment management fees for “diverse managers,” or those who are 50 percent or more minority- or women-owned, if they are retained by Citi’s ERISA-covered employer-sponsored benefit plans. The program provides diverse managers with a competitive advantage on the basis of race. The DOL stated that the previous opinion assumed the Racial Equity Program was lawful and discussed fiduciary issues that followed from that assumption.

However, the DOL explained that, currently, it believes the program is not lawful and that the “allocation of benefits on the basis of race clearly and unambiguously violates civil rights laws.” Further, the DOL explained that, while Citi previously claimed the Racial Equity Program may benefit the company because certain stakeholders might look favorably on it, “This is not now, nor has it ever been, a justification for violating the law.”

The new advisory opinion instructs Citi to take immediate action to end all illegal activity within its Racial Equity Program, as well as in any other initiative, plan, program, or scheme it operates under the banner of diversity, equity, and inclusion.

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