Fiduciary

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The Tenth Circuit held that a pension plan consultant, who misstated the amount of monthly pension payments that a pension plan participant would receive in retirement, was not a fiduciary under ERISA.

Plaintiffs Trent and Wendy Lebahn, who were participants in the National Farmers Union Uniform Pension Plan, claimed that the Plan, its Pension Committee…

On April 6, 2016, the U.S. Department of Labor released its Final Rule addressing when a person providing services to an employee benefit plan or individual retirement account (IRA) is considered to be providing investment advice that is subject to ERISA’s fiduciary standard.  As discussed in our Client Alert, available here, the rule expanded the types of communications that are subject to the fiduciary standard, extended fiduciary obligations to IRAs, and added new and revised prohibited transaction exemptions, one of which is the Best Interest Contract Exemption.

Today, the U.S. Department of Labor will release its highly-anticipated Final Rule and Exemptions addressing when a person providing investment advice with respect to an employee benefit plan or individual retirement account is considered to be a “fiduciary” under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code.  According to a Fact Sheet released in advance of the new rule’s publication, the “DOL has streamlined and simplified the rule to minimize the compliance burden and ensure ongoing access to advice, while maintaining an enforceable best interest standard that protects savers.”  According to the Fact Sheet:

  • The rule requires more retirement investment advisers to put their client’s best interest first, by expanding the types of retirement advice covered by fiduciary protections
  • The rule clarifies what does and does not constitute fiduciary advice
  • The exemptions will allow firms to accept common types of compensation – like commissions and revenue sharing payments – if they commit to putting their client’s best interest first
  • The rule and exemptions ensure that advisers are held accountable to their clients if they provide advice that is not in their clients’ best interest