Fiduciary Definition Proposal Being Redefined

The expansion of the Employee Retirement Income Security Act’s (ERISAs) definition of fiduciary has been thwarted, for now.  The hotly contested proposal has suffered a stream of bipartisan opposition, numerous comments, three days of hearings and intense lobbying from industry groups.  Recently, the Department of Labor’s (DOL) Employee Benefit Securities Administration (EBSA) announced it was withdrawing its proposed rule.

Motivated by an inability to bring enforcement actions against those providing investment services, EBSA’s proposal widened the purview of those that would qualify as an ERISA fiduciary by doing away with the 36 year old “five part test” and applying a streamlined analysis.  The proposal essentially branded investment advice as:

  • Any “understanding or agreement” that investment advice is being provided, or
  • If the advice “may be considered” in connection with a plan investment decision, regardless of whether it is provided on a regular basis.

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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