The information on this page relates to the October 2010 Notice of Proposed Rulemaking defining when a person providing investment advice becomes a fiduciary under the Employee Retirement Income Security Act.
The Employee Benefits Security Administration announced in September 2011 that it would repropose the rule. The reproposal can be found here.
As a result of the decision to repropose this rule, the Department closed the public record on this proposed rule.
ACLI - 2011 0301 - DOL - HEARING ON DEFINITION OF FIDUCIARY – INVESTMENT ADVICE - 9p
We share the Department’s interest in seeing that plans and participants who seek out and are promised advice that is impartial ultimately receive advice that adheres to the rigorous standards imposed by ERISA.
At the same time, we are concerned that the Proposed Rule’s pursuit of this objective interferes with investment sales and distribution practices that are customary in the marketplace, well understood, and commonly relied upon by financial services providers, plans and participants alike.
Parties engaged in transactions with ERISA plans and IRAs need clear, unambiguous rules by which to determine their duties and obligations.
Financial institutions such as life insurers and their sales representatives should not be treated as fiduciaries under ERISA when they are engaged in selling activities and are clear that they are acting in a sales capacity.
As responsible providers, we have an interest in seeing that our customers are well served, are happy with our products and services, and that our customers find them useful to the attainment of their financial goals.
3 - As we read the proposed regulation, the seller’s limitation applies to IRAs.
It is common for advisors and agents to engage customers and prospective customers on their particular goals and objectives to better understand their product and service needs. Based on these conversations, an advisor might explain the pros and cons of various investment vehicles including variable annuities, mutual funds, brokerage accounts, banking products, fixed annuities, alternative investments and several types of advisory accounts. Within each of these types of securities and property, advisors/agents can usually recommend several different specific securities that may have different features. The compensation paid by product and service will vary. For instance, compensation charged for executing a stock trade will differ from compensation received for selling an annuity. The seller’s limitation, with an appropriate indication of the seller’s interest, makes it possible to recommend products and services to customers.
[Bonk: No Mention of Life Insurance Policies, IUL's, LIRP's]
Jeffrey Zients spoke about the Department of Labor’s proposed new rules to protect workers' retirement savings. The rules would be similar to but more flexible than a 2010 proposal that was withdrawn by the Labor Department after complaints from Wall Street institutions.
Following Mr. Zients' keynote speech, a panel of current and former regulators, financial officers, and lawyers participated in a discussion about the potential policies. They focused on the protections they could afford, and the potential unintended consequences that could result from their implementation. Former Representative Bentsen made concluding remarks.
“Champions, Critics and Consequences of a New Fiduciary Standard” was held at the Bipartisan Policy Center.
2015 - DOL / EBSA - Definition of Fiduciary; Conflict of Interest Rule-Retirement Investment Advice and Related Proposed Prohibited Transaction Exemptions; Hearing and Comment Period Extension - Posted by the Employee Benefits Security Administration on Jun 17, 2015 - regulations.gov/document/EBSA-2010-0050-0205
EBSA-2010-0050-0205
public hearing on August 10, 11, and 12, and continuing through August 13, 2015 (if necessary)
The comment periods for the proposed rule and six proposed prohibited transaction exemptions published on April 20, 2015 (80 FR 21928, 21960, 22004, 22034, 22010, 22021, and 21989)
RIN 1210-AC02 - Retirement Security Rule: Definition of an Investment Advice Fiduciary
2017 0831 - DOL / EBSA - Proposed Rule - Extension of Transition Period and Delay of Applicability Dates - [link-Federal Register]
PTE 2016-01 - Best Interest Contract Exemption
PTE 2016-02 - Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs
PTE 84-24 - Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters