{"id":332,"date":"2016-04-30T20:45:25","date_gmt":"2016-05-01T03:45:25","guid":{"rendered":"https:\/\/erisa-experts.com\/blog\/?p=332"},"modified":"2016-04-30T20:59:54","modified_gmt":"2016-05-01T03:59:54","slug":"the-dol-promulgates-the-final-fiduciary-regulation","status":"publish","type":"post","link":"https:\/\/erisa-experts.com\/blog\/2016\/04\/30\/the-dol-promulgates-the-final-fiduciary-regulation\/","title":{"rendered":"The DOL Promulgates the Final Fiduciary Regulation"},"content":{"rendered":"

By Joseph A. Garofolo<\/a><\/span><\/span><\/p>\n

On April 8, 2016, the Department of Labor promulgated a final regulation regarding ERISA’s definition of fiduciary.\u00a0 The final regulation becomes applicable on April 10, 2017, and\u00a0is available here<\/a>.\u00a0\u00a0<\/span><\/p>\n

There were a number of changes between the proposed regulation published on April 20, 2015 and the final regulation.\u00a0 The Department\u00a0provided a chart summarizing changes\u00a0made\u00a0in response to the following issues raised in connection with the proposed regulation: the distinction between education and investment advice, the applicability of the regulation to health and welfare arrangements and appraisals, whether \u201chire me\u201d recommendations are subject to ERISA’s fiduciary standards, the applicability of the Best Interest Contract Exemption (the \u201cBICE\u201d)\u00a0(a class prohibited transaction exemption) to small plans and all asset classes,\u00a0disclosure requirements under the BICE, the applicability of the contract requirement to ERISA plans and arrangements not subject to ERISA (including individual retirement accounts \u201cIRAs\u201d<\/span><\/span>), the application of the regulation to call centers, web disclosure and data retention requirements, recommendations relating to proprietary products, lifetime income products, and\u00a0level fee arrangements,\u00a0fee-based account conversions, bias toward products with low fees, grandfather relief, and concerns regarding regulation implementation.\u00a0 The Department’s\u00a0chart is available here<\/a><\/span>. <\/span><\/p>\n

Finally,\u00a0 on April 8, 2016, the Department promulgated the following\u00a0exemptions relating to prohibited transactions under ERISA and the Internal Revenue Code of 1986, as amended:\u00a0i) the BICE (the Best Interest Contract Exemption); ii)\u00a0Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs; iii) Amendment to Prohibited Transaction Exemption (PTE) 75-1, Part V, Exemptions From Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefit Plans and Certain Broker-Dealers, Reporting Dealers and Banks; iv) Amendment to and Partial Revocation of Prohibited Transaction Exemption (PTE) 86-128 for Securities Transactions Involving Employee Benefit Plans and Broker-Dealers; Amendment to and Partial Revocation of PTE 75-1, Exemptions From Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefits Plans and Certain Broker-Dealers, Reporting Dealers and Banks; v)<\/span>
\n<\/span>Amendments to Class Exemptions 75-1, 77-4, 80-83 and 83-1; and vi) Amendment to and Partial Revocation of Prohibited Transaction Exemption (PTE) 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters.\u00a0 These documents can be accessed here<\/a><\/span>.<\/span><\/p>\n

While the retirement plan community continues to analyze the final regulation and its related exemptions, it is safe to say that many investment advisers and participants will be affected by\u00a0the significant changes made to the Department’s interpretation of \u201cinvestment advice\u201d as that phrase is used in ERISA\u00a0\u00a7 3(21)(A)(ii).\u00a0\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By Joseph A. Garofolo On April 8, 2016, the Department of Labor promulgated a final regulation regarding ERISA’s definition of fiduciary.\u00a0 The final regulation becomes applicable on April 10, 2017, and\u00a0is available here.\u00a0\u00a0 There were a number of changes between the proposed regulation published on April 20, 2015 and the final regulation.\u00a0 The Department\u00a0provided a … <\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,12,11,13],"tags":[],"class_list":{"0":"entry","1":"post","2":"publish","3":"author-jgarofolo","4":"post-332","6":"format-standard","7":"category-401k-plans","8":"category-definition-of-fiduciary","9":"category-erisa-regulations","10":"category-fiduciary-duties"},"_links":{"self":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts\/332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/comments?post=332"}],"version-history":[{"count":7,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts\/332\/revisions"}],"predecessor-version":[{"id":339,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/posts\/332\/revisions\/339"}],"wp:attachment":[{"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/media?parent=332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/categories?post=332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/erisa-experts.com\/blog\/wp-json\/wp\/v2\/tags?post=332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}