Compensation and Benefits Insights - March 2018

King & Spalding
Contact

Farewell to the Fiduciary Rule? The Fifth Circuit Vacates the Fiduciary Rule -

On March 15, 2018, the Fifth Circuit Court of Appeals, in Chamber of Commerce v. U.S. Department of Labor, vacated the Department of Labor’s (the “DOL’s”) fiduciary rule (the “Fiduciary Rule”) in a 2-1 decision. The Fiduciary Rule, which expansively reinterprets the term “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and includes amendments to six existing exemptions and two new exemptions to the prohibited transaction provisions in both ERISA and the Internal Revenue Code of 1986, as amended (the “Code”), generally went into effect on June 9, 2017 (with some provisions not coming into effect until July 1, 2019). Following the Fifth Circuit’s opinion, the DOL was reported to have announced that it will not enforce the Fiduciary Rule “pending further review.”

Background -

The Fiduciary Rule expands the category of advisers who are fiduciaries with respect to ERISA plans and individual retirement accounts (“IRAs”), and establishes two new prohibited transaction exemptions intended to allow service providers that become investment advice fiduciaries under the new rule to continue receiving compensation. Under the “best interest contract” or “BIC” exemption, an adviser that gives investment advice concerning an IRA or a non-ERISA plan must enter into a written contract with the advice recipient under which the recipient may sue the financial institution for failure to meet the fiduciary requirements.

Please see full Alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding
Contact
more
less

King & Spalding on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.