The Second Circuit recently held that in order to state a claim for a prohibited transaction pursuant to ERISA section 406(a)(1)(C), it is not enough to allege that a fiduciary caused the plan to compensate a service provider for its services.  Instead, “the complaint must plausibly allege that the services were unnecessary or involved unreasonable compensation.”  Cunningham v. Cornell Univ., 2023 WL 7504142 (2d Cir. Nov. 14, 2023).  Separately, the Second Circuit affirmed summary judgment for the defendants in connection with the plaintiffs’ fiduciary breach claims that were premised on allegations of excessive recordkeeping fees, underperforming investment funds, and the defendants’ failure to transition to lower-cost share classes of certain mutual funds.

On August 30, 2017, the Department of Labor (“DOL”) officially proposed delaying the applicability date of exemptions to its fiduciary rule until July 1, 2019. The proposal was expected after DOL stated in a court filing earlier this month that a delay proposal was under review by the Office of Management and Budget.

This proposal

On August 9, 2017, the Department of Labor (“DOL”) stated in a court filing that the Office of Management and Budget (“OMB”) is reviewing a proposal to extend the applicability date for certain requirements under DOL’s fiduciary rule until July 1, 2019. As discussed here and here the fiduciary rule’s “impartial conduct standards” have been in effect since June 9, 2017; but other requirements, including the written contract required under the Best Interest Contract exemption and certain disclosure requirements, have been delayed pending DOL’s review of the rule.  DOL’s request suggests that DOL will need significantly more time to complete its review of the rule.

On March 20, 2017, a federal court in the Northern District of Texas denied the U.S. Chamber of Commerce’s emergency motion for an injunction pending appeal challenging implementation of the Department’s conflict of interest rule and related exemptions. The court applied the standard for evaluating a preliminary injunction motion and concluded that: (i) the Department

On March 1, 2017, the U.S. Department of Labor proposed a 60-day delay of the conflict of interest rule and related exemptions (currently set to be applicable on April 10, 2017). The Department opened two comment periods related to the rule:

  1. A 15-day comment period (ending March 17, 2017) on whether enforcement of the rule