The Department of Labor’s (DOL) fiduciary rule passed in 2016, but has met with numerous obstacles and delays throughout its implementation. On March 15, the Fifth Circuit Court of Appeals overturned it completely, ruling that it represents overreach by the Department of Labor. The decision, which reversed an earlier district court ruling in favor of the regulation, states that the DOL exceeded its statutory authority in issuing the rule. The new ruling suggests that oversight of this issue should fall under the purview of the U.S. Securities and Exchange Commission (SEC).
The fiduciary rule had partially been implemented, with a delay of several of its provisions. President Trump had requested a comprehensive analysis of the best interest contract exemption and prohibited transaction exemption, which the DOL has presumably been working on. It remains to be seen what the DOL will do from here, and whether or not they will appeal the new ruling. The SEC is also working on setting out clear fiduciary standards.
Response to the news has been mixed, as the fiduciary rule had both vigorous supporters and opponents. At Arnerich Massena, we are proud that we have always been ahead of the curve on this issue. We have expressly acknowledged our fiduciary status and have offered independent, unbiased advice to retirement plans since our inception. Regardless of the status of the rule, we will continue to embrace our fiduciary status and work in the best interest of Arnerich Massena clients and our clients’ retirement plan participants.