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.

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

The DOL's New Fiduciary Rule: What We Can Expect

The DOL's regulatory agenda indicates that shortly, the DOL will be proposing a new fiduciary definition and proposing amendments to existing prohibited transaction exemptions to align with the proposed regulation. The new regulation will likely include the DOL's expanded interpretation of fiduciary advice for rollovers (and might go beyond that). It is also anticipated that many of the conditions in PTE 2020-02 will be included in the proposals for other exemptions.

Source: Brokerdealerlawblog.com, February 2023

Second Court Rejects DOL's Interpretation of ERISA's Fiduciary Rule

Two recent federal courts have rejected a key interpretation by the DOL of its own fiduciary rules under ERISA. These cases, and particularly the ASA case, which was decided earlier this week, could potentially act as a major impediment to the DOL's pursuit of a critical policy initiative relating to the regulation of rollover solicitations.

Source: Wagnerlawgroup.com, February 2023

Florida Court Strikes Down DOL Guidance Making Rollover Advice Fiduciary

A federal court in Tampa, Florida, on Monday, struck down DOL guidance that made a rollover recommendation for fiduciary investment advice. The American Securities Association had filed suit alleging that a DOL document improperly claimed that a one-time recommendation to transfer assets from a company plan to an IRA triggered fiduciary duty.

Source: Investmentnews.com, February 2023

Florida Court Strikes Down DOL Rollover Guidance

A federal court in Tampa, Fl, handed down a verdict in a case brought by the American Securities Association last February challenging the DOL's attempt to change existing retirement rules without going through a notice-and-comment rulemaking as is required under the Administrative Procedure Act. The Middle District of Florida court ruled that DOL's interpretation of the five-part test determining who qualifies as a fiduciary under ERISA was "arbitrary and capricious."

Source: 401kspecialistmag.com, February 2023

DOL Regulations Expand Liability for Financial Advisors Giving Pension Rollover Advice

The DOL began fully enforcing its Prohibited Transaction Exemption 2020-02 as of July 1, 2022. These regulations apply to and expand liability for financial advisors giving clients pension rollover advice. Some aspects of the rule were already in effect. Still, advisors must now provide clients with a mandatory written explanation of why the investment professional or financial institution believes the rollover is in the client's best interest. Financial institutions must adopt policies and procedures to ensure compliance with the Impartial Conduct Standards and mitigate conflicts of interest.

Source: Hallbenefitslaw.com, October 2022

What Broker-Dealers Need to Know About Correcting PTE 2020-02 Mistakes

The DOL expanded its interpretation of fiduciary advice in the Preamble to PTE 2020-02 and as a result, many more broker-dealers and their registered representatives are fiduciaries for their recommendations to retirement investors, including rollover recommendations. Broker-dealers should implement good processes and documentation to satisfy the PTE conditions and closely supervise their investment professionals to ensure that the processes are followed.

Source: Brokerdealerlawblog.com, September 2022

DOL's Rules on Rollover Advice Now in Effect

While aspects of the rule were already in effect, now advisors must also provide the mandated written explanation to rollover clients of the specific reasons as to why the investment professional and/or financial institution believes that the rollover is in the client's best interest, or else face substantial potential liability. This exposure is likely to trigger coverage under professional liability policies, as opposed to fiduciary liability policies which protect plan sponsors.

Source: Wtwco.com, July 2022

DOL Pushes Back on "Downright Bizarre" Fiduciary Challenge

The DOL is pushing back against litigation challenging specific elements of its FAQs regarding the fiduciary rule. The suit (Am. Sec. Ass’n v. U.S. Dep't of Labor) was one of two filed earlier this year challenging the DOL's PTE 2020-02. While both were filed on behalf of individuals whose businesses were detrimentally impacted by the expanded definition of fiduciary, specifically in this case in FAQs issued after the regulation. The suit alleged that the Labor DOL regulated via the FAQs, rather than going through the standard, required, notice and comment period.

Source: Ntsa-net.org, July 2022

The ERISA Fiduciary Advice Exemption

DOL rules prohibit a plan fiduciary from using its fiduciary authority to benefit itself or an affiliate. A prohibited transaction involving a retirement plan cannot be cured through disclosures, and violations can lead to the potential for excise tax liability. Importantly, when an adviser deals with IRA clients, ERISA's fiduciary duties do not apply, but the prohibited transaction and excise tax provisions of the Code do. In this article, Groom attorneys discuss DOL-Prohibited Transaction Class Exemption 2020-02, which is a continuation of the DOL's efforts to further regulate interactions between financial professionals and retirement clients.

Source: Groom.com, June 2022

Advisors Unprepared for New 401k Rollover Rules

Big changes to retirement plan and IRA rollover rules will happen this Friday, July 1st. Yet too many advisors are unwilling or unable to take Prohibited Transaction Exemption 2020-02 seriously, and it's a problem, says ERISA expert and Faegre Drinker Partner Fred Reish.

Source: 401kspecialistmag.com, June 2022

Podcast: New Role(s) With Rollovers

In this podcast Nevin Adams & Fred Reish discuss the new parameters, how they're applied, the conditions that might (and might not) be sufficient to warrant rolling money out of a qualified plan and into an IRA, and the new requirement that the justification as to why that move is in the interests of the plan participant.

Source: Napa-net.org, June 2022

Fiduciary Rule Draws Second Legal Challenge

Last week, a group representing advisors who sell annuities challenged the legality of the fiduciary rule in federal court. And now a second suit filed in a different federal court accuses the Labor Department of making law with a series of FAQs.

Source: Napa-net.org, February 2022

Once More Unto the (Fiduciary) Breach: FACC Suit Against the DOL

If the FACC's complaint is ultimately successful some potential positive outcomes include: overturning some of the more controversial elements of the preamble to PTE 2020-02 including the DOL's relatively new views on the regular basis prong and the mutual agreement prongs of the five-part test and overturning the DOL's position that the advice to take a rollover is likely to be fiduciary advice. For now, however, the resolution of the case is a long way off. It is anticipated that the DOL will move to dismiss the lawsuit, and even if the lawsuit survives dismissal, the DOL is expected to vigorously defend against it.

Source: Groom.com, February 2022

Annuity Group Sues DOL Over Fiduciary Rule

The Federation of Americans for Consumer Choice has gone to court to try to block a DOL revival of an Obama-era definition of the term fiduciary. FACC contends that the department made the interpretation change in the preamble, or official introduction, to a "prohibited transaction exemption" revision, rather than in the actual text of the revised exemption.

Source: Thinkadvisor.com, February 2022

PTE 2020-02 Compliance: Avoiding Five Common Mistakes

It may be a New Year, but 2022 is going to seem very familiar to Broker-Dealers and their Registered Representatives who advise retirement plans and IRAs. They are going to be spending a lot of time working to comply with new exemptions and new ERISA rules coming from the DOL. As some of these deadlines are right around the corner, this article reviews the five common pitfalls and problems, and how to better address them in disclosures and policies and procedures.

Source: Brokerdealerlawblog.com, January 2022

DOL Temporarily Extends Non-Enforcement Relief for Investment Advice Fiduciaries

On October 25, 2021, the DOL issued Field Assistance Bulletin 2021-02, temporarily extending its non-enforcement policy regarding certain rules applicable to fiduciaries who provide investment advice for 401k plans, per Prohibited Transaction Exemption 2020-02, released in December 2020. The temporary non-enforcement policy now extends generally through January 31, 2022; it was originally set to expire on December 20, 2021.

Source: Compliancedashboard.net, November 2021

DOL Updates the Fiduciary Rule (Again)

The DOL issued updated guidance on the so-called "Fiduciary Rule," which will be enforceable beginning Dec. 20, 2021. The DOL set out the steps investment advice professionals should take to satisfy the prohibited transaction exemption, which allows them to offer investment advice. The guidance also clarified that recommendations around out-of-plan rollovers could be considered fiduciary advice.

Source: Callan.com, October 2021

Unpacking the latest DOL Fiduciary Investment Advice Rule

In December 2020, the DOL reinstated the five-part test and issued a revised interpretation of the definition of "investment advice" under ERISA. Additionally, a new prohibited transaction exemption was established. Then, in 2021, the DOL issued further guidance to clarify the rule changes.

Source: Fidelity.com, September 2021

DOL Fiduciary Rule 3.0: The Sprint to December 20

In the absence of further direction from DOL, it now has become incumbent on firms to accelerate their Rule 3.0 compliance project if the December 20 date is to be met, and in particular to implement PTE 2020-02 or an alternative solution if they are or may be serving as a fiduciary in rollover interactions.

Source: Eversheds-Sutherland.com, September 2021

DOL Official Sheds Light on Rollover Recommendations

Cautioning those looking to "game the system," a senior Labor Department official affirmed July 27 that suggesting investments that could occur after a rollover is tantamount to recommending the rollover, and if it meets the rest of the five-part test will constitute fiduciary advice regardless of how it's phrased.

Source: Asppa.org, July 2021

DOL Exemption Impacts Investment Advice Fiduciaries

The DOL recently issued guidance concerning a new exemption under the prohibited transaction provisions of ERISA in connection with the provision of investment advice. PTE 2020-02, Improving Investment Advice for Workers & Retirees, became effective on February 16, 2021. On April 13, 2021, the DOL issued additional guidance, in FAQ format, to further explain the Exemption. In this article, the authors explain the significance of this new guidance.

Source: Mwe.com, July 2021

New DOL Prohibited Transaction Exemption Regulates Investment Advice Fiduciaries

On April 13, 2021, the DOL issued clarifying guidance for Prohibited Transaction Exemption 2020-02, Improving Investment Advice for Workers & Retirees, which became effective on February 16, 2021. The DOL guidance for investment advice providers comes in a series of 21 FAQs that address three main subjects reviewed here.

Source: Hallbenefitslaw.com, July 2021

A DOL Fiduciary Rule and PTE Refresher

No matter if an adviser is a flat-fee registered investment adviser or a commission-based broker/dealer, the DOL says the collection of compensation related to rollover guidance is almost always going to be a prohibited transaction, triggering the need for an exemption.

Source: Planadviser.com, June 2021

DOL Confirms Fiduciary Rule Rewrite, Other Agency Priorities

The 10-year saga of the fiduciary rule will continue. As various administration officials had been suggesting over the past few months, the DOL's Spring 2021 Regulatory Agenda confirms that the Employee Benefits Security Administration plans to issue a Notice of Proposed Rulemaking addressing the definition of fiduciary. The DOL agenda item shows that EBSA plans to issue the NPRM by December 2021.

Source: Ntsa-net.org, June 2021

Retirement Plan Fiduciaries and the DOL Investment Advice Rules

The DOL's latest attempt to address these concerns is Prohibited Transaction Exemption 2020-02. This guidance offers important takeaways for employer-plan fiduciaries concerning hiring and monitoring: (1) those who advise you about the investment funds that should be included in the plan; and (2) those who provide advice to participants about their investment fund selection in the plan or on rollovers.

Source: Wnj.com, June 2021

DOL Issues Guidance on New Fiduciary Rule

The DOL issued guidance that reinforces that the new investment advice regulation in retirement accounts will strengthen oversight of rollover recommendations and require investment advisers to mitigate conflicts of interest.

Source: Jdsupra.com, June 2021

Fiduciary Investment Advice: Implications of DOL Prohibited Transaction Exception 2020-02

The Exemption regulates the conduct of "Investment Advice Fiduciaries" who provide investment and/or rollover advice. "Investment Advice Fiduciaries" are investment advisers, broker-dealers, banks, and insurance companies and their employees, agents, and representatives. The Exemption very squarely places the responsibility for compliance with its requirements on outside investment advisors. To rely on the Exemption, besides other requirements, Investment Advice Fiduciaries must provide certain disclosure and meet specified standards of conduct.

Source: Benefitslawadvisor.com, May 2021

Tougher DOL Fiduciary Rule Is on the Way. But When?

Attorneys warned this week that Labor is setting up "regulatory whiplash" and huge compliance costs by requiring retirement advisors to comply with a new fiduciary prohibited transaction exemption that it plans to eventually amend.

Source: Thinkadvisor.com, May 2021

DOL Warns the ERISA Fiduciary Debate Is Far From Over

In a troubling development, the DOL has announced its expectation that it will proceed to propose yet another iteration of investment advice guidance under ERISA -- which would become Rule 4.0 -- possibly on even more radical terms than its 2016 Rule 2.0 that was vacated by the Fifth Circuit Court of Appeals.

Source: Eversheds-Sutherland.com, April 2021

DOL Issues Interpretative Guidance on Investment Advice Prohibited Transaction Exemption

The DOL issued a set of previously promised FAQs addressing its new prohibited transaction exemption. PTE 2020-02 allows "investment advice fiduciaries" to employee benefit plans and individual retirement accounts to receive certain otherwise prohibited compensation, including commissions, 12b-1 fees, revenue sharing, and mark-ups and mark-downs in certain principal transactions. The exemption expressly covers prohibited transactions resulting from rollover advice, advice on how to invest assets within a plan or IRA, and advice on whether to engage in certain principal transactions.

Source: Ropesgray.com, April 2021

DOL Issues Guidance for Investment Advice Providers

The DOL has issued separate guidance documents for investment advice providers and retirement plan investors to help them understand and respond to the new Prohibited Transaction Exemption 2020-02. Adopted last December, PTE 2020-02 allows financial institutions and investment professionals who provide fiduciary investment advice to receive various forms of otherwise prohibited compensation if they comply with certain requirements.

Source: Thomsonreuters.com, April 2021

DOL Issues Guidance on 2020 Investment Advice Exemption

The DOL released a set of Frequently Asked Questions designed to clarify certain aspects of Prohibited Transaction Exemption 2020-02. The exemption enables investment advice fiduciaries to ERISA plans and IRAs to receive a wide range of compensation as a result of the advice without running afoul of the applicable prohibited transaction rules. This piece summarizes some of the key takeaways from the FAQs.

Source: Fiduciarygovernanceblog.com, April 2021

Rollovers, Regular Basis Focus of DOL Guidance

New DOL guidance on fiduciary investment advice provides important insights on the agency's perspective on the new rule, particularly as it relates to rollover advice and a reminder that other changes may well lie ahead. Of most immediate interest is likely the second of two documents -- a set of compliance-focused frequently asked questions -- with guidance for investment advice providers who are relying upon the exemption.

Source: Asppa.org, April 2021

DOL Releases Additional Prohibited Transaction Exemption Guidance

The DOL has issued two pieces of guidance on its new fiduciary advice prohibited transaction exemption, PTE 2020-02. The first piece is intended to educate retirement savers about considerations when choosing a potential advisor. The second piece of guidance, which is briefly highlighted here below, is titled, "New Fiduciary Advice Exemption: PTE 2020-02 Improving Investment Advice for Workers & Retirees," and is a detailed set of frequently asked questions.

Source: Ascensus.com, April 2021

The Twists and Turns of the DOL Fiduciary Rule

The DOL's fiduciary rule still generates discussion. That's staying power, it was first proposed more than a decade ago. A March 31 NTSA webcast took a look at the rule and current developments involving it.

Source: Asppa.org, April 2021

Broker-Dealer Services to Plans: Impact of the DOL Fiduciary Advice Exemption

The PTE will likely affect the business of broker-dealers that regularly make investment recommendations to IRA owners, as well as retirement plans and their participants (including rollover recommendations). As a result of these changes, broker-dealers need to re-evaluate whether and when they (and their investment professionals) may be fiduciaries, and where they are fiduciaries, they need to develop compliant practices, policies, and procedures. Here are five key points of which brokerage firms should be aware.

Source: Brokerdealerlawblog.com, March 2021

The ERISA "Best Interest" Debate: Is There Anything Left to Argue About?

As the DOL's Fiduciary Rule 3.0 takes effect, the DOL has suggested that it might in the future "improve this exemption, the rule defining who is an investment advice fiduciary, and related exemptions to build on this approach." The Fifth Circuit Court of Appeals opinion that vacated Rule 2.0 leaves no room to expand the regulatory definition of fiduciary status, however. As to the exemption, when compared to the gold standard for proponents of more ERISA regulation -- the vacated Best Interest Contract Exemption -- there may be nothing left to argue about.

Source: Eversheds-Sutherland.com, February 2021

Is the Final Fiduciary Rule Really Final?

In a press release addressing the effective date of the new fiduciary rule, the DOL stated that "In the coming days, the agency will publish related guidance for retirement investors, employee benefit plans and investment advice providers" and "we will continue our stakeholder outreach to determine how we might improve this exemption, the rule defining who is an investment advice fiduciary, and related exemptions to build on this approach." Thus, while the rule is final and effective, there may be future modifications.

Source: Cammackretirement.com, February 2021

DOL Confirms Investment Advice PTE

The DOL has confirmed that the Trump administration's "Improving Investment Advice for Worker & Retirees" Prohibited Transaction Exemption for investment advice fiduciaries will go into effect as scheduled on February 16, 2021. The DOL adds that "in the coming days" it will publish related guidance for retirement investors, employee benefit plans, and investment advice providers.

Source: Asppa.org, February 2021

Biden's DOL to Implement Trump Fiduciary Rule

The DOL announced that it will allow a Trump-era exemption for investment advice fiduciaries to move forward. The exemption, "Improving Investment Advice for Worker & Retirees," grants certain forms of compensation for fiduciary advice and will go into effect as scheduled on February 16.

Source: 401kspecialistmag.com, February 2021

What Labor Nominee Walsh Means for the Fiduciary Rule's Future

President Biden named Boston Mayor Martin Walsh as his nominee for Secretary of Labor. Walsh's nomination raises questions for the future of the DOL's fiduciary rule, which regulates investment fiduciaries under ERISA. In particular, the new fiduciary rule guidelines promulgated by the DOL in December 2020 appear to be in jeopardy under a Biden administration with Walsh as Labor Secretary.

Source: 401kspecialistmag.com, January 2021

The Emerging Patchwork of Fiduciary Investment Advice Regulation: Putting the Pieces Together

Many fiduciary and best interest investment advice regulations advanced at both the federal and state levels last year. As we begin 2021, firms subject to these regulations face challenges in dealing with rules that impose a host of new obligations, and that at times overlap and conflict with one another. This chart is intended to help firms take stock of the evolving framework and aid firms in putting the pieces together.

Source: Eversheds-sutherland.com, January 2021

DOL's Fiduciary Interpretation and Exemption: Impact on Rollover Recommendations

Since the effective date for the exemption is after the inauguration of the Biden administration, it is almost certain that the effective date will be further delayed. During that delay, we think it is likely the exemption will be revised or possibly withdrawn. But, it is just as likely that the expanded definition of fiduciary advice for rollover recommendations will be retained and possibly expanded. That could make life more difficult for broker-dealers, investment advisers, and insurance companies. While these rules will affect all of those industries, this article focuses on the impact of the likely outcomes on broker-dealers.

Source: Brokerdealerlawblog.com, January 2021

DOL Issues Final Investment Advice Prohibited Transaction Exemption

Under the PTE, plan fiduciaries are required to meet impartial conduct standards, provide certain disclosures, conduct annual reviews, maintain policies and procedures, and keep records. However, the PTE relaxes proposed restrictions on fiduciary compensation to allow fiduciaries to be compensated for advice to rollover assets from retirement plans to individual retirement accounts and engage in transactions that previously were not permitted.

Source: Icemiller.com, January 2021

Key DOL Prohibited Transaction Exemption Considerations

A recent webinar emphasized a few important points about the new prohibited transaction exemption recently finalized by the DOL. It was explained that everyone is initially eligible for the DOL's new prohibited transaction exemption, but the regulator reserves the right to suspend eligibility for up to 10 years after certain violations.

Source: Planadviser.com, December 2020

DOL Reconsiders Who Can Be Considered a Fiduciary

Attorneys with Groom Law Group explain how the DOL has extended the reach of its "five-part test" for determining fiduciary status under ERISA. This makes its new prohibited transaction exemption all the more important, according to attorneys.

Source: Planadviser.com, December 2020

DOL's Fiduciary Rule 3.0 -- Exemption and Investment Advice Fiduciary Definition

On December 18, 2020, the DOL adopted with limited changes its Proposal 3.0 regarding ERISA fiduciary investment advice, focused on the fiduciary status of rollover advice and a "best interest" prohibited transaction exemption for conflicted advice aligned with the primary regulation of various types of financial services providers. While the final guidance broadly retains the structure and approach of Proposal 3.0, the DOL incorporated some important changes in response to comments.

Source: Eversheds-Sutherland.com, December 2020

A Few Important Points About the DOL's Fiduciary Actions

The DOL has confirmed that a financial professional cannot simply write their way out of a functional fiduciary relationship. This point relates to the "mutual understanding" prong of the five-part test which stipulates that two parties' "reasonable understandings of their relationship" are critical to determining whether they have arrived at a mutual agreement, arrangement, or understanding that the investment advice will serve as a primary basis for investment decisions. Under the new framework, written statements disclaiming a mutual understanding or forbidding reliance on the advice as a primary basis for investment decisions are not determinative.

Source: Planadviser.com, December 2020

ERISA's Fiduciary Saga Continues: DOL Issues Final Exemption With New Commentary

The DOL issued a release finalizing an important new initiative for retirement accounts that are subject to ERISA or Section 4975 of the Internal Revenue Code. The Release finalizes Prohibited Transaction Class Exemption 2020-2, but gives rise to at least three broad important considerations.

Source: Dechert.com, December 2020

Investment Advice Fiduciary Class Exemption Published, Effective Date Set

Appearing in the Federal Register is DOL's Prohibited Transaction Exemption 2020-02, which will provide guidance to investment advisors who counsel retirement and other investors. With the publication of the guidance, PTE 2020-02 becomes effective February 16, 2021.

Source: Ascensus.com, December 2020

DOL Publishes Final Fiduciary Prohibited Transaction Exemption

The DOL has published the final version of a new prohibited transaction exemption. The text of the exemption notice stretches to nearly 300 pages, so it will naturally take some time for the full implications to be realized. However, the final rule confirms the reinstatement of the traditional five-part test for determining fiduciary status, though it does not definitively state that advice regarding IRA rollovers necessarily triggers fiduciary status.

Source: Planadviser.com, December 2020

DOL Unwraps New Fiduciary Standard as a PTE

The Department of Labor has rolled out a new prohibited transaction exemption for offering investment advice, and some good news on rollover advice, but it may be short-lived. Less than 24 hours after the release from review by the Office of Management and Budget, the DOL has unwrapped a new exemption, one that is slated to become effective 60 days after it is published in the Federal Register and yes, that would fall after Jan. 20, when it could be reviewed by the incoming Biden administration.

Source: Asppa.org, December 2020

DOL Fiduciary Rule Rewrite Ready for Liftoff?

The Labor Department's proposed new fiduciary rule has moved one step closer to being finalized and could be released any day now. While we don't yet know what's in the final version, the original filing suggested that the final rule is "economically significant," which could delay the effective date for 60 days and allow the incoming Biden administration to review it before taking effect.

Source: Napa-net.org, December 2020

Department of Labor Takes Another Look at Investment Advice

On June 29, 2020, the DOL proposed a prohibited transaction exemption called Improving Investment Advice for Workers & Retirees, which could have a substantial impact on the compliance operations of financial firms and their representatives. Possibly, the most significant development can be found in the preamble to the exemption. The DOL states that it will now interpret more broadly its long-standing regulation in defining investment advice.

Source: Groom.com, December 2020

OMB Has Received a Final Fiduciary Rule From DOL

The sense of deja vu associated with the filing of a finalized fiduciary rule by the Department of Labor is palpable, but one ERISA expert says this version could stick -- for good -- despite the pending change in administration.

Source: Planadviser.com, December 2020

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.