Three Takeaways From DOL's New Fiduciary Proposal

Three Takeaways From DOL's New Fiduciary Proposal

November 2, 2023, Law360

Jason Levy’s commentary was included in a Law360 article examining the Department of Labor’s (DOL) new proposal to expand what constitutes fiduciary investment advice under the Employee Retirement Income Security Act (ERISA). Jason comments on the scope of the new regulation.

"Requiring that more rollover recommendations be in the retirement investor's best interest" was one of the most significant expected benefits of the proposal, the DOL said in the regulatory impact analysis of its proposed rule amending the ERISA fiduciary definition. Jason shared that his key takeaway from this was "as expected, the rule is intending to capture nearly all rollover recommendations as fiduciary investment advice. Whether in fact those rollover recommendations — whether that's going to stay, whether the recommendations are subject to the fiduciary standard — is a question that's been previously the subject of active litigation.” He added, "It seems very likely that this aspect of the rule is going to be challenged in court."