The Back-and-Forth of the ERISA Fiduciary Rule

In late April, the U.S. Department of Labor released its new fiduciary investment advice definition in a package titled the ''Retirement Security Rule'' (the 2024 Package). The 2024 Package is made up of four different components and represents a continuation of DOL's efforts to expand the types of interactions between retirement savers and financial professionals that are subject to ERISA's embrace. In 2016, DOL had issued a regulatory package with similar aims that was vacated by the U.S. Court of Appeals for the Fifth Circuit. Subject to delaying legal challenges, the 2024 Package is scheduled to take effect September 23, 2024.

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Related Content

• ERISA Fiduciary Duties
  Learn more about the 2024 Package. In summary, it includes an amendment to PTE 2020-02 that (1) expands the PTE’s scope to include recommendations of any investment product, regardless of whether the product is sold on a principal or agency basis; (2) revises the disclosure requirements for more consistency with other investment adviser regulations; (3) provides streamlined exemption provisions for financial institutions that give fiduciary advice in connection with an ERISA Section 3(38) investment manager request-for-proposal; and (4) provides that an investment advice fiduciary could lose the ability to rely on the exemption for 10 years upon the occurrence of certain criminal convictions, misleading the DOL in its exemption oversight, or intentionally or systematically violating the exemption’s conditions. 

• Prohibited Transaction and Disqualified Persons Checklist (IRC Rules)
  Reference this checklist and see how DOL’s new rules revise the 1975 five-part test for determining when a person renders investment advice, conferring fiduciary status, after a previous attempt to do so was rescinded after a successful legal challenge.

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