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Advisers Are Still Fiduciaries Under the Five-Part Test (PDF)

"[DOL FAB 2018-02] states that advisers may continue to apply transition versions of the BIC exemption, which allows advice fiduciaries to engage in riskless principal transactions, or of the principal transaction exemption, which lets them engage in principal transactions with respect to certain securities.... [T]he FAB is only temporary and provides only enforcement relief from the DOL. Thus, the FAB may be more helpful when a principal transaction involves an IRA rather than an ERISA-governed plan."

'Tax Cuts' Act Raises the Tax on Funds Generating UBTI (PDF)

"The tax code now requires that the trust or VEBA calculate gains and losses of each 'trade or business.' In the absence of regulations or additional guidance from the Treasury Department or the IRS providing otherwise, the IRC now appears to require that a trust or VEBA treat each investment fund as a separate trade or business. Therefore, the ability to calculate gains and losses on a net basis is lost. Further, the trust or VEBA may not use future NOLs generated by one fund to offset gains generated by another fund."

Must a Plan's Security Policies Meet the Duty of Prudence? (PDF)

"Two recent cases alleging breach of fiduciary duty under [ERISA] in connection with the distribution of participant account balances in defined contribution plans highlight the compliance and litigation risks associated with plan losses.... Benefit-plan-market participants should take the opportunity to help the DOL craft sensible guidance that balances the need to protect plan assets and the requirements of ERISA.... Guidance should recognize that participants play a role in protecting their plan benefits."

Best Execution Standard

"Registered broker/dealers (B/Ds) and investment advisers have long been required to comply with a 'best execution' standard when making trades for their clients. That obligation is now one of the conditions a financial institution and financial professional must meet to take advantage of [PTE 2020-02]. The failure to meet the standard will result in the loss of exemptive relief."

Guaranteed Lifetime Income: SECURE Act Provides Plan Fiduciaries with a Safe Path (PDF)

"[W]hen considering whether a plan should include lifetime income options, some plans want assurance that they may stop providing the benefit or feature at some point without violating the IRC. SECURE Act Section 109 addresses this concern[.]"

Advisers Still Headed for More Fee Transparency

Excerpt: Fee disclosure regulations did not make it into the Federal Register before the new administration stepped in, but that is not necessarily a signal for advisers to relax about fee disclosure. In general, the industry is moving toward being more disclosure-oriented, said Roberta Ufford, principal at Groom Law Group, speaking with PLANADVISER.com. One of the drivers behind the move toward transparency is a fear of litigation from participants, she said. In general, the regulatory environment is shifting toward disclosure. 'If you've been waiting for 408(b)(2) regulations to update your disclosures, stop waiting,' Ufford said .... It's still a good time to re-examine your fee disclosure.

Do Non-ERISA 403(b) Plan Sponsors Have Fiduciary Responsibilities?

David W. Powell, Esq., The Groom Law Group, speaking to attendees at the National Tax Sheltered Accounts Association's (NTSAA) 403(b) Advisor Summit, pointed to the Uniform Management of Public Employee Retirement System Act (UMPERSA), which imposes a prudent standard for the main employee retirement system of states. It excludes 403(b)s, but, Powell noted, as states adopt 403(b)s, such language is used in state law.