19 November 2017

Expansion of ERISA’s Fiduciary Standard

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One critical issue that Plan Sponsors and other fiduciaries should consider is the impact of the recent push by the Department of Labor (DOL) to expand the definition of fiduciary under federal retirement law. There is clear evidence that the DOL will move forward with their fiduciary proposal although many have objected to its expansion over concerns about 401(k) rollover rules. In addition the members of the financial industry are concerned over the increase costs by imposing Employee Retirement Income Security ACT (ERISA) fiduciary standards on brokers selling individual retirement accounts (IRAs). The potential to become a fiduciary under ERISA by providing guidance to an individual making a rollover distribution from his retirement account may reduce the already concerning issue of participation education. Because of these issues the DOL’s Employee Benefits Security Administration (EBSA) has withdrawn the proposal and announce it will solicit more information.
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