DOL Re-Proposes Fiduciary Rule
On April 14, 2015, the U.S. Department of Labor (DOL) re-proposed its rule expanding the definition of fiduciary. A re-proposed fiduciary definition was initially released in October of 2010, but the Department of Labor withdrew it less than a year later. The re-proposal comes after President Obama announced that he had directed the DOL to move forward with the proposed rulemaking. The proposed rule would expand the definition of fiduciary to include persons who provide investment advice or recommendations to benefit plans, plan fiduciaries, participants, beneficiaries, IRAs, or IRA owners in a wider array of circumstances than currently provided for under ERISA and the Internal Revenue Code. As a result, stricter standards would apply to service providers who give retirement investment advice.
Once the regulations are finalized, employers will need to review their current service provider arrangements to determine whether those arrangements will meet the new standards. With the proposed rule, the DOL also issued two new prohibited transaction class exemptions and amendments to certain class exemptions that already existed. The proposed rule is open for comment until July 6, 2015.