401khelpcenter.com Logo

COLLECTED WISDOM™ on the DOL and SEC Fiduciary Rules

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

To subscribe to our free weekly newsletter, enter your email address below then click the "Join" button.

Email Address:



Other topical areas you may find of interest include Fiduciary Responsibility and Liability Issues and Fiduciary Related News and Intelligence.

Compensation Requirements under Proposed Amendments to PTE 2020-02

Broker-dealers and their registered representatives providing services to private sector tax-qualified and ERISA-governed retirement plans, participants in those plans, and IRA owners are subject to several compensation rules. ERISA's fiduciary responsibility rules mandate that ERISA plans pay no more than reasonable compensation to service providers (including advisors). This article focuses on the compensation limitations in the DOL's proposed amendments to PTE 2020-02.

Source: Brokerdealerlawblog.com, February 2024

Regulation Best Interest and Individual Retirement Accounts

The retirement security proposal, proposed by the DOL in October, would apply fiduciary duties under ERISA to rollovers to individual retirement accounts, among other transactions. Opponents of this proposal say that the SEC's Regulation Best Interest has been regulating these transactions since June 2020, and the DOL proposal is therefore unnecessary. This article reviews what Reg BI requires when it comes to rollovers.

Source: Planadviser.com, February 2024

Five Things to Consider About the Fiduciary Rule Redux

There is a long road from a fiduciary proposal to a rule in force. By now, the proposed new fiduciary rule has been read, digested, analyzed, and the subject of countless articles, webinars, and more. So, where do you go now as an advisor? Advisors may want to look at the new rule through this framework.

Source: Napa-net.org, February 2024

Smaller Accounts, Insurance Product Impact Debated at Hearing on Fiduciary Proposal

Opponents of the Department of Labor's retirement security proposal testified at a Congressional hearing Thursday that the proposal would dramatically decrease access to advice for smaller account holders, while proponents argued it is a necessary regulation to reduce and mitigate investor abuses.

Source: Planadviser.com, February 2024

House Lawmakers Debate Merits of DOL's Proposed Fiduciary Rule

Coming slightly more than a month after its first hearing on the Department of Labor's proposed investment advice fiduciary rule, a second subcommittee of the House of Representatives debated the merits of the proposal, with the battle lines drawn between the two parties. The DOL is currently reviewing the thousands of comment letters that were submitted to it earlier. The DOL's unified agenda does not show a target release date for a final rule.

Source: Asppa.org, February 2024

Retirement Security Proposal Addresses "Significant Gaps," EBSA Official Says

Tim Hauser says the DOL's retirement security proposal, sometimes called the fiduciary proposal, is not the same as the proposal made in 2016, as some critics have suggested. The latest iteration of the proposal has been the subject of widespread debate and controversy since it was first proposed in October. Hauser, the deputy assistant secretary for program operations of the DOL's Employee Benefits Security Administration, offered insight into why the Department of Labor continues to pursue it.

Source: Planadviser.com, February 2024

The DOL Fiduciary Proposal's Impact on Banks and Trust Departments

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. In this newest episode, they look at the DOL's fiduciary proposal's impact on banks and trust departments.

Source: Spotlightonbenefits.com, February 2024

The Fiduciary Rule's Foray Into Uncharted Territory

Generating over 19,000 written comments, the DOL's proposed fiduciary rule changes hit a "vein." Though the proposed changes are complex and multi-tiered, there are two of them that are particularly garnering most of the attention.

Source: Businessofbenefits.com, February 2024

Podcast - DOL Fiduciary Hearings and Comment Letters: Part 1

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this podcast, Fred and Brad offer a high-level view of current trends and recent ERISA developments primarily around the DOL fiduciary hearings and comment letters.

Source: Spotlightonbenefits.com, January 2024

Regulation May Impact Advisor-Intermediated Rollovers From DC Plans

Retirement plan advisors impart a high degree of influence over 401k participants' decisions related to IRA rollovers. However, as wealth management firms continue to pursue opportunities in ERISA-covered retirement plan space, they will need to navigate and overcome new and pending regulation imposing more stringent fiduciary requirements when recommending IRA rollovers, according to The Cerulli Edge -- U.S. Retirement Edition.

Source: Cerulli.com, January 2024

Fiduciary Rule May Curtail Wealth Managers Pursuing Retirement Planning

A new study by Cerulli Associates looks at how wealth managers must navigate the looming DOL fiduciary rule when recommending individual retirement account rollovers to defined contribution participants. As wealth management firms move into the retirement planning space, more will have to comply with ERISA, and thereby, the pending fiduciary rule proposed by the DOL in October.

Source: 401kspecialistmag.com, January 2024

Oxford Survey Finds DOL May Have Underestimated Compliance Cost of Fiduciary Proposal

A survey conducted by Oxford Economics estimated that the compliance costs associated with the DOL's fiduciary proposal could grossly exceed the estimates provided by the DOL. The survey, commissioned by the Financial Services Institute, estimated that $2.77 billion would be required to come into compliance with the proposal in the first year, whereas the DOL estimated first-year costs to be about $253 million.

Source: Planadviser.com, January 2024

Big Names Back Latest Proposed Fiduciary Rule

While many financial services firms and related trade groups have expressed their opposition, several high-profile firms have come out in support of the latest iteration of the DOL's proposed fiduciary rule. Aggregation firm HUB mirrored certain arguments made by the American Retirement Association in its comment letter supporting the rule (with suggested changes), specifically mentioning the current regulatory gap concerning one-time recommendations to plan sponsors that are not considered fiduciary advice.

Source: Asppa.org, January 2024

Loaded With Teeth and Better Crafted, the Latest 'DOL Rule' Attracts 19,000 Comments

ERISA lawyers are saying that we have the new DOL rule that does much the same as the old, but there's a big difference. The DOL learned its lessons about how to present its case and the language this time is tighter and more threatening to vested interests. That begins to explain how it generated 19,000 comments, including 134 pages from SIFMA, the chief force holding together a wildly huge if fading, coalition of banks, insurers, and brokerages that are determined to make 'suitability' a good enough standard. But it's running out of intellectual and even practical firepower and the battle over the DOL's rule shows that it's even losing ground to slow-footed government bureaucracies.

Source: Riabiz.com, January 2024

Fiduciary Rule: The Timeline for the Final Regulation and Exemptions

The DOL published its proposed fiduciary regulation and prohibited transaction exemptions in the Federal Register on November 3, 2023. That was the beginning of a process that will end with the final rules and their effective and applicability dates. This article is Fred Reish's best guess about the timing of the process to complete the DOL's work.

Source: Fredreish.com, January 2024

Congress Voicing Concerns With DOL Fiduciary Rule Proposal

Many in Congress are joining thousands of the more than 19,000 commenters in voicing concerns with the DOL's controversial proposed "Retirement Security Rule: Definition of an Investment Advice Fiduciary." Fifty bipartisan reps sent a letter urging that the controversial rule be withdrawn, and the House Capital Markets Subcommittee will hold a hearing Wednesday to explore its necessity.

Source: 401kspecialistmag.com, January 2024

Rollover Recommendations Will be Fiduciary Advice. And What About Withdrawals? Podcast

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. This new episode looks at rollover recommendations that will be fiduciary advice, but what about withdrawals?

Source: Spotlightonbenefits.com, January 2024

American Securities Association Says DOL Acting Secretary Cannot Finalize Fiduciary Proposal

The American Securities Association filed a comment letter with the DOL arguing that the fiduciary proposal, also known as the retirement security proposal, is unlawful for a variety of reasons. The letter does not speak directly to the merits of the proposal, but it is a possible preview of many of the legal arguments that will arise in litigation if the rule is finalized.

Source: Planadviser.com, January 2024

EBSA Rejects Requested Delay as Proposed Fiduciary Rule Moves Forward

The DOL's Employee Benefits Security Administration issued a letter rejecting a request for delays in the rulemaking process concerning the expansion of the definition of fiduciary under ERISA. The Securities Industry and Financial Markets Association, American Retirement Association, and various other financial groups previously sent a joint letter to EBSA, requesting that the agency extend the comment period and delay the public hearing regarding the proposed fiduciary rule.

Source: Hallbenefitslaw.com, January 2024

ARA Submits Comment Letter to DOL on Proposed Fiduciary Rule

In their comment letter submitted to the Department of Labor on Jan. 2, 2024, the American Retirement Association expressed support for the department's proposed definition of "fiduciary invest. Advice" and amendments to PTE 2020-02. In the letter, they also shared several specific concerns and recommended revisions.

Source: Asppa.org, January 2024

The Proposed DOL Fiduciary Rule: Significant Changes for Advisers

The DOL's recently issued proposed rule would expand the definition of fiduciary advice to cover many services provided by advisers to retirement plans and IRAs. Under this expanded definition, advisers may need the relief provided by Prohibited Transaction Exemption 2020-02 to avoid a prohibited transaction. The DOL has also proposed amendments to PTE 2020-02. This article describes the proposed fiduciary advice rule and the proposed amendments to PTE 2020-02 and discusses the impact these proposals, if finalized, will have on advisers.

Source: Fredreish.com, December 2023

Empower, SPARK Push Back Against Fiduciary Proposal

Empower, the country's second-largest retirement recordkeeper by assets, filed a letter with the Department of Labor on Thursday, calling for the full withdrawal of the department's retirement security proposal, sometimes called the fiduciary adviser proposal. Empower is the first major recordkeeper to submit a comment letter before the January 2 deadline. The SPARK Institute, an advocacy organization for the retirement plan industry, also called on the DOL to withdraw the rule during oral testimony at a hearing on December 12.

Source: Planadviser.com, December 2023

DOL Proposes Expansion of ERISA's Fiduciary Rule to Include More Investment Advisors

The DOL has issued a proposed rule that would include subjecting more investment advisors to ERISA's fiduciary rule, including its strict conflict of interest provisions. The proposed rule comes five years after the U.S. Court of Appeals for the Fifth Circuit struck down the DOL's 2018 final rule defining who qualifies as an ERISA fiduciary. According to the DOL, the purpose of the proposed rule is to ensure that investment professionals receive fair remuneration for their advice and properly place their clients before their commissions.

Source: Hallbenefitslaw.com, December 2023

DOL's Fiduciary Rule Faces Uncertain Future

The Department of Labor's fiduciary rule faces a "rocky road" ahead due to expected litigation, despite regulators pushing to finalize the rule, according to Jason Bortz, the Capital Group's senior counsel. Although regulators are motivated to finalize the rule, it will likely face litigation, says Bortz.

Source: Planadviser.com, December 2023

Fiduciary Rule Proposal Faces 1st Day of Dissent, Advocacy

The Department of Labor's Employees Benefit Security Administration on Tuesday hosted the first of two days of public comment on its proposed retirement security rule, also known as the fiduciary adviser rule, with dissenters and advocates taking turns on a live-streamed hearing. The DOL's Retirement Security rule is seen as overbearing by some, and necessary by others.

Source: Planadviser.com, December 2023

Fiduciary Rule Round Three

This article overviews the Proposed Rule, how the Proposed Rule relates to (and differs from) the vacated 2016 Fiduciary Rule, and the perceived impact on investors and investment professionals currently subject to the existing regulatory landscape. The article also addresses related prohibited transaction exemptions that round out the proposed regulatory package, and how the package aims to level the playing field and provide clear and equal application of fiduciary protections.

Source: Truckerhuss.com, December 2023

For Many, DOL's Fiduciary Proposal May Be "Less Daunting" Than at First Blush

Outside of the banking and insurance contexts, an overview of the proposed changes to PTE 2020-02 shows that the changes are somewhat less daunting than they may seem at first blush and are not drastic for many parts of the industry as some headlines have suggested.

Source: Asppa.org, December 2023

How to Navigate the New ERISA Fiduciary Advice Proposal

If you're confused and overwhelmed about the DOL's latest proposed rule defining who is an invest. advice fiduciary for purposes of the ERISA, you're not alone. But where does one begin, and how do they ensure they're not inadvertently tripped up? What, specifically, does it mean for retirement plan advisors, sponsors, and participants?

Source: Napa-net.org, November 2023

Are There Boogeymen in the New Fiduciary Proposal?

The author writes regarding the DOL's new fiduciary proposal that, "rumors abound, and some law firms (certainly those that represent the interests of those who would be newly subject to new regulations) have, to my read anyway, been inclined to see plenty of clouds in the silver linings -- and to characterize the new proposal as basically being a resurrection of the old one (to that end, the Halloween unveiling made for plenty of 'zombie' references) -- in the process imagining things that aren't actually 'there.'"

Source: Napa-net.org, November 2023

A Guide to the DOL's Retirement Security Rule Proposal

The DOL's new "retirement security rule" package is the latest chapter in an almost 15-year effort by the DOL to amend the five-part test in its 1975 regulation for determining whether a person is a "fiduciary" by providing invest. advice for a fee. Very generally speaking, the Proposed Rule would significantly expand the circumstances under which a person could be treated as providing invest. advice that is subject to ERISA's fiduciary standards.

Source: Erisapracticecenter.com, November 2023

DOL's Retirement Security Rule Muddies Definitional Waters

The White House and the DOL framed the new fiduciary rule as a narrowly tailored regulation necessary to protect consumers in light of changes to the retirement system over the past five decades. However, the new proposal is better viewed as a sweeping regulatory overhaul that would change how much of the retirement services industry interacts with plans, participants, and individual retirement account owners. In this article, Michael Kreps, Groom principal and chair of the firm's Retirement Services group, explores the DOL's proposed rule for defining a fiduciary and current opposition to the rule.

Source: Groom.com, November 2023

House Passes Amendments Blocking DOL Fiduciary Rule

The House of Representatives voted on November 15th to pass key amendments in H.R. 5894, or the Labor, Health, and Human Services, Education, and Related Agencies Appropriations Act, that would prevent the DOL from using any allocated funds for its fiduciary proposal.

Source: 401kspecialistmag.com, November 2023

The New Fiduciary Rule: Fixed Indexed Annuities

Statements from the White House indicate that the DOL and the White House are concerned that fixed-indexed annuities may be inappropriately sold to participants and IRA owners in connection with recommendations to roll over benefits from plans and to transfer money from IRAs. The reaction from the insurance industry and state insurance commissioners has been immediate and strong. If the proposals become final as written, the greatest impact of the changes will likely be on insurance agents, particularly independent producers. This article covers the impact on independent insurance agents, insurance companies, and annuities.

Source: Fredreish.com, November 2023

Department of Labor's Fiduciary Rule 4.0 Proposal

An initial analysis of the DOL's October 31 Fiduciary Rule proposal to again redefine ERISA fiduciary "invest. Advice" and to remake the complex of ERISA exemptions allowing conflicted advice. The author assesses that the proposal is not "more narrowly tailored" than the vacated 2016 rule.

Source: Eversheds-Sutherland.com, November 2023

House to Vote on Bill Blocking Funding for DOL's Fiduciary Rule

The U.S. House of Representatives will vote on a spending bill (H.R. 5894) that contains key amendments restricting funding for the DOL's recently proposed fiduciary rule.

Source: 401kspecialistmag.com, November 2023

DOL Proposes Major Changes to Fiduciary Advice Definition

On November 3, 2023, the DOL published a new set of regulatory proposals in its long-running effort to expand the circumstances under which a person will be considered an investment advice fiduciary for purposes of ERISA and the parallel provisions of the Internal Revenue Code and to change the landscape of prohibited transaction exemptions available to those fiduciaries. This article provides an overview of the 2023 Proposed Regulation.

Source: Groom.com, November 2023

Fiduciary Rule Advisory

The Department of Labor will soon be publishing in the Federal Register a proposed change to the definition of the term "fiduciary" under section 3(21) of ERISA, as well as amendments to two current class exemptions, PTE 84-24 and PTE 2020-02. This is a summary and overview of the proposals and their anticipated effects.

Source: Steptoe.com, November 2023

The New Fiduciary Rule: An Overview

The DOL has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for invest. advice to plans, participants (including rollovers), and IRAs. This Fred Reish blog post is an overview of the new proposals. His follow-up posts will go into detail on each of the proposals.

Source: Fredreish.com, November 2023

Halloween 2023: DOL Fiduciary Rule Returns From the Dead

In this latest sequel, the DOL has promulgated another proposed amendment to the rules determining when a person who makes a recommendation to someone responsible for the investment of the assets of an employee benefit plan or individual retirement account is deemed to be a fiduciary. This proposed rule would, if adopted, substantially expand the occasions upon which such a recommendation will make a person a fiduciary. The rule would affect broker-dealers, banks, and insurance companies, and could affect any other financial services business that markets investment products to U.S.-based retirement plans and IRAs.

Source: Debevoise.com, November 2023

DOL Tries Once Again to Define What Constitutes Invest. Advice Under ERISA

On Friday, November 3, the DOL issued its latest attempt to redefine who is an invest. advice fiduciary under ERISA. In conjunction with the regulatory proposal, the DOL also published amendments to several existing prohibited transaction exemptions. The proposal has generated a strong adverse reaction from a broad coalition of industry trade groups. This is a review of the DOL's regulatory proposal and amendments.

Source: Carltonfields.com, November 2023

Key Issues to Know for the Proposed Fiduciary Rule

On October 31, the DOL released the highly anticipated proposed "fiduciary rule." The Biden administration continued its theme of eliminating "junk fees" in this instance addressing the cost of superfluous fees on Americans' retirement savings. The hundreds of pages that address the rule and related material are quite complex, but essentially they address several key issues reviewed here.

Source: Callan.com, November 2023

A Preview of Lifetime Income Issues Under the Proposed Fiduciary Regime

There is much to be considered under the new set of fiduciary rules recently proposed by the DOL, especially as we sort through the details of this new regulatory regime. However, regardless of what your position may be about the efficacy or appropriateness of these changes, there are a few striking characteristics regarding these new proposals that will "inform" many of the discussions (pro and con) that we are going to see.

Source: Businessofbenefits.com, November 2023

Breaking Down the DOL's Five-Part Test

When word got out that the DOL was issuing its proposed fiduciary rule this week -- and that President Joe Biden would speak on its framing -- the retirement planning advisory industry had a lot to say. Almost all concluded with the idea that if enacted into law, the proposal would cause several changes to the DOL's five-part test. This article breaks those changes down.

Source: 401kspecialistmag.com, November 2023

DOL Publishes New Adviser Fiduciary Rule for Public Comment

The DOL published a widely anticipated proposal that will redefine when retirement advice triggers fiduciary status under ERISA. The proposal would scrap the traditional five-part test for determining if an adviser is acting in a fiduciary capacity and replace it with a three-part test in which satisfying any one of the three conditions would make the adviser a fiduciary. The change, if implemented, would effectively create a stricter regulatory environment for financial professionals advising or selling investment products related to retirement savings.

Source: Planadviser.com, November 2023

Biden Administration Previews Fiduciary Rule Rollout

The Biden Administration has issued a fact sheet previewing the content of the new fiduciary rule. The fact sheet focuses on the issue of conflicted advice, specifically calling out what it calls "junk fees" and the impact they have on retirement security. Acknowledging that while "responsible retirement advisers deserve to be paid for their important work," it continues that "when a firm pays a retirement adviser more to recommend a specific investment product, that creates a conflict of interest that often leads to Americans selecting an investment product recommended to them that generates lower returns."

Source: Asppa.org, October 2023

DOL Releases Proposed Fiduciary Rule

The Department of Labor has released a new proposed rule updating the definition of an investment advice fiduciary under ERISA. According to a Biden Administration fact sheet, the proposal expands the definition of fiduciary in several ways which are reviewed here.

Source: Ascensus.com, October 2023

DOL Fiduciary Rule Released: Industry Reaction Pours In

The text of the DOL's new fiduciary rule is out, and the reactions from around the retirement industry are streaming in. Aligned with the Biden-Harris administration's efforts to protect retirement investors the proposal would require trusted investment advisors to adhere to high standards of care and loyalty when they make investment recommendations and avoid recommendations that favor their financial and other interests at the expense of retirement savers.

Source: 401kspecialistmag.com, October 2023

DOL Fiduciary Proposal Expected by End of October

The Office of Management and Budget held its final meetings on the DOL's new fiduciary rule proposal, and a full proposal is likely to be released by the end of October, retirement industry sources speaking on background confirmed this week. The OMB is currently considering a draft proposal submitted by the DOL which the budget office must first approve before it is sent out for comment.

Source: Planadviser.com, October 2023

OMB Begins Holding Stakeholder Meetings for New Fiduciary Rule

The OMB typically takes between 60 and 90 days to review a proposal, but it can also extend the process. The DOL's still-unpublished fiduciary rule draft was first sent to the OMB on September 8, so industry actors hope a published proposal will be released for comment between November 7 and December 7. The OMB has begun holding meetings with stakeholders to discuss the proposal.

Source: Planadviser.com, October 2023

DOL Makes Another Fiduciary Foray

Late one recent Friday afternoon, the Department of Labor dropped off a draft regulatory package for review that would redefine fiduciary investment advice under ERISA. In this podcast, Nevin Adams and Fred Reish explore the possibilities of this initiative including the history and potential future.

Source: Napa-net.org, September 2023

DOL Braces for Hostile Reception to Fiduciary Rule Rewrite

A top DOL official pushed back against criticism of a soon-to-be-released proposal that could expand federal benefits law's reach over retirement plan advisers who give investment advice for a fee, saying the regulations shouldn't be judged until they have been publicly unveiled.

Source: Wagnerlawgroup.com, September 2023

A Condensed History of the DOL's Fiduciary Rule

ERISA is less than one year away from turning 50. For nearly the entirety of those 50 years, it has defined fiduciary investment advice using a five-part test. Attempts in 2010 and 2016 to modify the 1975 regulation containing the definition were unsuccessful. Recently, the DOL sent a new proposed regulation to the Office of Management and Budget. Here is a condensed history of the DOL's Fiduciary Rule.

Source: Plansponsor.com, September 2023

DOL Sends New Fiduciary Rule to OMB

The DOL has sent a new, proposed fiduciary rule to the Office and Management and Budget for review. The text of the proposal is not yet public. OMB must first conduct an interagency review process. The proposal will then be returned to DOL and published in the Federal Register. The entire process can be completed in a matter of weeks, but it typically takes several months.

Source: Groom.com, September 2023

Republican Leaders Discourage 3(21) Fiduciary Rule Amendment

Updating the fiduciary rule remains a key area of focus for the DOL, despite missing a published August timeline. However, Representative Virginia Foxx, R-Virginia, and Senator Bill Cassidy, R-Louisiana, published on Thursday a public letter to Julie Su, the acting director of the DOL, discouraging the department from proposing a revised 3(21) fiduciary rule.

Source: Planadviser.com, September 2023

The DOL's Regulatory Agenda and a New Fiduciary Rule

The anticipated DOL proposed fiduciary regulation could be sent to the Office of Management & Budget in a matter of weeks. The proposal will likely say that a rollover recommendation to a participant in an ERISA-governed retirement plan is a fiduciary act. The DOL will also likely propose amendments to prohibited transaction exemptions, including PTE 84-24, the exemption used for fiduciary rollover recommendations into individual annuity contracts.

Source: Fredreish.com, August 2023

DOL Fiduciary Rule Update With Fred Reish

In this edition of the 401k Specialist Pod(k)ast, Fred Reish provides an overview of the PTE 2020-02 issue, what approach he thinks the DOL may take, provides a timeline for the regulation and some key thoughts on what this all means for retirement plan advisors.

Source: 401kspecialistmag.com, July 2023

Incoming DOL Fiduciary Rule Slated for August

The retirement industry can expect to see a new fiduciary proposal this August, said the Department of Labor in its just-released Spring Regulatory Agenda.

Source: 401kspecialistmag.com, June 2023

DOL Fiduciary Rulemaking in Jeopardy Amidst Recent Court Rulings

Two recent federal court decisions -- one in Florida and one in New York -- have cast significant doubt on the ability of the DOL to issue and enforce formal regulations defining who qualifies as a fiduciary under federal benefits law. It may also make it challenging for the DOL to issue a legally valid final rule on the subject.

Source: Hallbenefitslaw.com, May 2023

Federal Court Partially Invalidates DOL's ERISA Guidance

In her ruling, the judge found that FAQ 7 of the April 2021 guidance, issued by the DOL's Employee Benefits Security Administration, conflicted with federal benefits and administrative procedures laws. The DOL guidance concerns when retirement plan rollover recommendations constitute investment advice. The judge further found that the policy was an arbitrary and capricious interpretation of current law. As a result, the judge vacated and remanded that portion of the guidance to EBSA for further proceedings.

Source: Hallbenefitslaw.com, May 2023

Florida Court Decision's Impact on Rollover Advice

The court did not change the regulatory definition of fiduciary advice and its application to advice to retirement plans or IRAs. Even if the expanded interpretation for rollover recommendations does not apply, where broker-dealers and their advisors provide ongoing advice to retirement investors they can still be fiduciaries for recommendations to IRA owners, plan fiduciaries, and participants. As a result, broker-dealers and their advisors will still need the relief provided by PTE 2020-02, including the best interest process it requires.

Source: Brokerdealerlawblog.com, March 2023

Court Overturns DOL Guidance on Rollover Advice

A federal court has vacated part of the 2021 DOL rollover guidance for investment advice fiduciaries. In one of those FAQs, DOL said a recommendation to roll over a participant's retirement plan account to an individual retirement account may be fiduciary investment advice when the advisor expects to give ongoing advice after the rollover. According to the court, this guidance contradicts the agency's current regulation.

Source: Mercer.com, March 2023

401khelpcenter.com, LLC is not the author of the material referenced in this digest unless specifically noted. The material referenced was created, published, maintained, or otherwise posted by institutions or organizations independent of 401khelpcenter.com, LLC. 401khelpcenter.com, LLC does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.

About | Glossary | Privacy Policy | Terms of Use | Contact Us

Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.