DOL Releases New Fiduciary Rule

DOL Releases New Fiduciary Rule

November 1, 2023, SHRM

Jason Levy’s commentary was included in a SHRM article about a new Department of Labor (DOL) rule that updates the definition of an investment advice fiduciary under the Employee Retirement Income Security Act (ERISA). Jason analyzed how the rule may impose unintended consequences on employer plan fiduciaries.

“For example,” Jason said, “a key focus of the rule is to capture rollover recommendations as fiduciary investment advice. If the proposal is enacted, this rule would impose new obligations on many service providers whose rollover communications will be subject to the fiduciary standard. However, the rule does not provide clarification as to employer plan fiduciary's obligations with respect to monitoring such rollover communications.”

Jason added that the DOL should "address this ambiguity and make clear that the DOL does not intend to put employer plan fiduciaries in the position of having a duty to monitor their service providers' compliance with the rule."