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DOL FAQs Guide Compliance Efforts during Fiduciary Rule Transition Period

June 6, 2017

Authors

benefitsbclp

DOL FAQs Guide Compliance Efforts during Fiduciary Rule Transition Period

June 6, 2017

by: benefitsbclp

The Department of Labor has issued guidance in the form of Frequently Asked Questions to help firms and their advisers impacted by the Fiduciary Rule know what is expected on and after June 9, 2017, on and after January 1, 2018, and during the period between (the “Transition Period”).  We’ve outlined a few of the highlights below:

As of June 9, 2017, firms and their advisers must comply with the “Best Interest Contract Exemption” and the “Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs”.  However, fewer conditions must be met to comply with these exemptions during the Transition Period.

As described fully in the Fiduciary Rule, the “impartial conduct standards” generally require fiduciaries to make recommendations that are prudent, loyal, and free from material misrepresentation and to receive only reasonable compensation for such recommendations.  The impartial conduct standards do

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Worried About the Fiduciary Rule? Don’t Be…Yet!

March 21, 2017

Authors

benefitsbclp

Worried About the Fiduciary Rule? Don’t Be…Yet!

March 21, 2017

by: benefitsbclp

Pen Marking Days on a CalendarThe Department of Labor (DOL) released Field Assistance Bulletin 2017-01 on March 10, 2017, which outlines a temporary enforcement policy related to its final fiduciary rule.

Background

On February 3, 2017, President Trump directed the DOL to re-examine the final rule’s impact. As a result, on March 2, 2017, the DOL opened a 15-day comment period (which ended last Friday) on a proposed 60-day delay of the rule’s effective date, from April 10, 2017 to June 9, 2017.

Simultaneously, the DOL opened a 45-day comment period on the substance of the actual rule. This second comment period affords the DOL with an opportunity to review comments before June 9, 2017 (the proposed delayed effective date). At such point, the DOL could allow the final rule to take

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Fiduciary Rule Under Review – Delayed Applicability Date

March 1, 2017

Authors

Katharine Finley and Chris Rylands

Fiduciary Rule Under Review – Delayed Applicability Date

March 1, 2017

by: Katharine Finley and Chris Rylands

In a prior post, we covered President Trump’s order directing the Department of Labor to review the new regulation and, as it deems appropriate, to take steps to revise or rescind it.  The Employee Benefits Security Administration (“EBSA”) has taken the first step in response to that order by proposing a 60 day delay in the applicability date. The final rule had an applicability date of April 10, 2017.  Likewise, the prohibited transaction exemptions (“PTEs”) included in the final rule, such as the Best Interest Contract Exemption, had an applicability date of April 10, 2017.

In light of the President’s prior order, EBSA has released the text of a proposed rule, to be published on March 2, 2017, delaying the applicability date of the final rule and the PTEs by 60 days.  EBSA noted that there were only 45 days until the rule and the PTEs became effective

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Just Push Pause: Revisiting Proposed Regulations

February 21, 2017

Authors

Katharine Finley and Brian Berglund

Just Push Pause: Revisiting Proposed Regulations

February 21, 2017

by: Katharine Finley and Brian Berglund

On January 20, 2017, President Trump signed an executive order entitled “Regulatory Freeze Pending Review” (the “Freeze Memo“).  The Freeze Memo was anticipated, and mirrors similar memos issued by Presidents Barack Obama and George W. Bush during their first few days in office.  In light of the Freeze Memo, we have reviewed some of our recent posts discussing new regulations to determine the extent to which the Freeze Memo might affect such regulations.

TimeoutThe Regulatory Freeze

The two-page Freeze Memo requires that:

  • Agencies not send for publication in the Federal Regulation any regulations that had not yet been so sent as of January 20, 2017, pending review by a department or agency head appointed by the President.
  • Regulations that have been sent for publication in the Federal Register but not yet published be withdrawn,
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  • Fiduciary Rule Under Review – Update

    February 6, 2017

    Authors

    Lisa Van Fleet and Steven Schaffer

    Fiduciary Rule Under Review – Update

    February 6, 2017

    by: Lisa Van Fleet and Steven Schaffer

    On Friday, President Trump issued an order directing the Department of Labor to review the new regulation to determine whether it is inconsistent with the current administration’s policies and, as it deems appropriate, to take steps to revise or rescind it.

    The long awaited Fiduciary Rule expanded protection for retirement investors and included a requirement that brokers offering investment advice in the retirement space put clients’ interests first.  Financial institutions that either implemented, or were rapidly completing, their compliance efforts to comply with the Fiduciary Rule will need to assess the impact of this order on these efforts.  Notwithstanding many earlier reports that the rule would be delayed 180 days, the date on which the rule was to take effect (April 10, 2017) has not been delayed.  However, it is anticipated that a delay will be forthcoming, making the decision whether or not to proceed with further

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    Stop! Drop! …and Roll. Smothering Regulations Before They Ignite.

    January 13, 2017

    Authors

    Sarah Bhagwandin and Jennifer Stokes

    Stop! Drop! …and Roll. Smothering Regulations Before They Ignite.

    January 13, 2017

    by: Sarah Bhagwandin and Jennifer Stokes

    It has been an eventful 10 days in the courts and in Congress for halting impending regulations and setting the stage to roll-back new rules implemented by the Obama Administration. Employers can expect a repeal of recently passed regulations is on the horizon in the area of benefits regulation.

    ACA — 1557 Regulations: Discrimination Based on Gender Identity or Pregnancy Termination

    A nationwide injunction prohibiting the Department of Health and Human Services (HHS) from enforcing nondiscrimination rules promulgated under ACA section 1557 as they relate to discrimination on the basis of gender identity or termination of pregnancy was imposed by a federal judge on December 31, 2016. (Franciscan Alliance, Inc. v. Burwell, N.D. Tex., No. 16-cv-108, 12/31/16)  The plaintiffs argued that section 1557 regulations forced health care professionals and religious-based facilities to provide gender transition services against their medical judgment and religious beliefs.

    Regulations under 1557

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    Department of Labor Fiduciary Rule: Employers Should Not Overlook Impact on HSAs

    May 18, 2016

    Authors

    Richard Arenburg and Denise Erwin

    Department of Labor Fiduciary Rule: Employers Should Not Overlook Impact on HSAs

    May 18, 2016

    by: Richard Arenburg and Denise Erwin

    HSAThe new Department of Labor rule defining the scope of who is an ERISA fiduciary (see our prior post here) has caused much consternation among investment professionals.  Much of the new rule is focused on reworking the outer fringes of the ERISA landscape capturing those in the investment industry offering IRA and annuity products.

    Given that investment professionals appear to be the primary target of the new fiduciary rule, employers may believe that this is one room in the ERISA house of horrors that they do not have to enter.  To a large extent that is true because the concept of fiduciary status and the fee disclosure rules, as applied to traditional retirement plans, are already well entrenched.  Still, employers need to consider whether certain providers to their retirement

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    Education or Advice: The DOL Final Definition of Fiduciary; Conflict of Interest Rule

    April 21, 2016

    Authors

    Katharine Finley and benefitsbclp

    Education or Advice: The DOL Final Definition of Fiduciary; Conflict of Interest Rule

    April 21, 2016

    by: Katharine Finley and benefitsbclp

    Changes AheadEarlier this month, the Department of Labor finally released the long-awaited “Definition of Fiduciary; Conflict of Interest Rule.”

    This blog post is intended to do two things:

  • Provide a brief history of the proposal, and
  • Provide an overview of the key points of the final rule and how it differs from the 2015 proposal.
  • For additional materials and information on the Final Rule, visit the DOL webpage. In addition, you can access all 200 plus pages of the final rule here.

    I.  The “Conflict of Interest” Rule’s History

    Since the adoption of ERISA, the governing regulations have mandated use of a five-part test that dictates whether an individual will be considered an investment advice fiduciary. In order to rise to the level of an investment

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    DOL’s Expansion of the Definition of Investment Advice (or “Fiduciary”)

    April 17, 2015

    Authors

    Lisa Van Fleet

    DOL’s Expansion of the Definition of Investment Advice (or “Fiduciary”)

    April 17, 2015

    by: Lisa Van Fleet

    Who's Holding Your Piggy Bank?Acting on reaction to a proposed and subsequently withdrawn regulation from October 2010 and attempting to address concerns expressed by both interested parties to the initial proposed regulation and an economic analysis by the Council of Economic Advisors (that the Investment Company Institute considers flawed), the Department of Labor has issued a new proposed regulation expanding the definition of investment advice. The DOL’s stated purpose in doing so is to protect retirement plan and IRA investors from practices engaged in by some advisors whose interest in providing investment advice is conflicted and not in the best interest of the participant or IRA owner.

    The proposed rule does not expand the definition of fiduciary per se, but instead it expands the areas of advice that are rendered by

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    Proposed Rule Re-defining ERISA “Fiduciary” Delayed (Still)

    July 30, 2014

    Authors

    Lisa Van Fleet and Denise Erwin

    Proposed Rule Re-defining ERISA “Fiduciary” Delayed (Still)

    July 30, 2014

    by: Lisa Van Fleet and Denise Erwin

    Regulations and RulesBroker-dealers and financial advisers may have gained some breathing room as a congressional battle to broaden ERISA’s definition of “fiduciary” loses steam.  In the following discussion, we will summarize the current state of that battle.

    At issue is the innocuous-sounding “Conflict of Interest Rule” proposed by the Employee Benefit Security Administration (“EBSA”), that has nonetheless sparked searing critiques from the investment advice industry, which contends it could dramatically increase costs and reduce access to quality investment advice for millions of American workers.  The re-proposal of the controversial rule has been delayed again, this time until January 2015, well after the mid-term elections in November.  Assuming a six-month comment period and six months of hearings to develop final regulations, the final rule could be up for

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