The district court decision spells out a number of caveats impacting this type of ERISA litigation, explaining why it is dismissing some claims while permitting others to go to a full trial.
Some communications with terminated participants are required by law, but plan sponsors can take this farther—from offering the opportunity to repay loans to invitations to social events.
A new ruling has emerged in the long-running case, applying instructions from the Supreme Court and the 9th Circuit to reach a verdict favorable to plaintiffs.
FSR says, “access to investment services for investors with modest-sized and small account balances has been, and will continue to be, substantially diminished as a result of the best interest contract (BIC) exemption’s onerous compliance burdens and litigation risks.”
Along with its comment letter to the Department of Labor, SIFMA sent study results that showed advisers have reduced access to retirement advice and products.
Many retirement industry providers will be glad to see the DOL is starting to signal a delay in the applicability date of the full new fiduciary rule and its prohibited transaction provisions.
In general, if a covered service provider will continue after the fiduciary rule to provide services only in a non-fiduciary capacity, or has already effectively disclosed investment advice fiduciary status, no additional disclosure would be required under the 408b(2) regulation.
Several states are in the process of debating and potentially adopting
their own legislation relating to the fiduciary responsibilities of
broker/dealers and investment advisers.
At least one judge on the three-judge panel that has been assigned to the case seemed to have little sympathy for the basic strokes of the DOL’s arguments.
The DOL is still seeking information from DC industry providers and stakeholders regarding potential new and amended administrative class exemptions from the prohibited transaction provisions of ERISA.
The Affordable Retirement Advice for Savers Act seeks to repeal the fiduciary rule and clarify what should and should not be considered fiduciary advice in the retirement planning context.
Because revenue-sharing payments are asset based in the plan, plaintiffs argue, “they bear no relation to a reasonable recordkeeping fee and can provide excessive compensation.”
While HSAs aren’t traditionally thought of as a retirement vehicle, the DOL broadened the scope of conflict of interest rules to include these plans due to their long-term savings and investment aspects.