2023 DOL Fiduciary Rule Developments: Recent Cases, Five-Part Test, Rollover Advice, Next Steps for Advisers

Strafford

The DOL's fiduciary rule has undergone many revisions and challenges over the last few years. The rule expanded the definition of "investment advice," resulting in several entities being deemed fiduciaries. Under the rule, essentially any recommendation made to a plan or its participants to take a particular course of action is considered fiduciary advice subject to few exclusions.

In addition, recommendations to take a rollover from a plan and guidance on how to invest rollover assets as well as the selection of investment managers and investment account arrangements are considered fiduciary advice under the DOL fiduciary rule. However, recent cases applying the five-part test cast doubt on the application of the DOL fiduciary rule.

In American Securities Association v. U.S. Department of Labor, et al., the court decided that "regular basis" of the five-part test should be applied on a plan-by-plan basis as such relates to rollover investment advice. The court stated that assets cease to be assets of an ERISA plan after the rollover is complete and any future provision of advice is no longer to that ERISA plan. This case marks another vacatur that a federal court has issued in connection with the DOL's interpretation of the investment advice fiduciary rule.

There are several exclusions from the fiduciary definition outlined in the rule. If a provider satisfies the conditions of an exclusion, it will not be deemed a fiduciary, even when providing investment-related recommendations to retirement clients.

Benefits counsel must understand the impact of the rule on retirement plan sponsors, advisers, and service providers to advise their clients on compliance and implementation best practices.

Listen as our panel discusses recent court decisions that significantly impact the application of the DOL fiduciary rule, courts' application of the five-part test to determine fiduciary status, and key considerations for financial advisers and plan sponsors.

Outline

1. Overview of current DOL fiduciary rule
2. The "fiduciary advice" definition and exclusions
3. Recent court decisions
4. Key considerations for sponsors, administrators, and advisers
5. Compliance planning
6. Implementation

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