DOL Returns to Previous Guidance on Fiduciary Status

Partner David Kaleda is quoted in Plan Sponsor on the Department of Labor’s decision to return to its prior guidance on fiduciary status following recent court rulings vacating the Biden era fiduciary rule.

The DOL also unexpectedly “vacated” the Preamble to the original Prohibited Transaction Exemption 2020-02.  As David notes, the DOL “went through great pains to explain why notice and comment was not needed,” likely an attempt to get in front of any challenges or simply to clear a path for future rulemaking.

Looking ahead, David explains that financial institutions are likely to reassess fiduciary status, particularly around rollover recommendations and compliance with Prohibited Transaction Exemption 2020 02, while cautioning that “it is too early to tell whether firms will get comfortable that no rollover recommendations are investment advice.”

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