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DOL Fiduciary Standard Resource Center


The Department of Labor (DOL) has proposed a change to the definition of fiduciary under the Employee Retirement Income Security Act (ERISA) that would expand the scope of those who become fiduciaries.

The Employee Retirement Income Security Act (ERISA) requires fiduciaries of pension plans to perform certain due diligence on service providers and plan investments. This helps ensure that the fiduciary is acting in the best interest of the plan's participants. In 2010, the Department of Labor (DOL) proposed a change to the definition of fiduciary under the Employee Retirement Income Security Act (ERISA) that would have expanded the scope of those who become fiduciaries, which will capture more of the current services of 401(k) and IRA providers. This proposal would have forced investors from commission-based accounts to higher cost fee-based advisory accounts, that could ultimately lead to a number of negative consequences for individual investors, including limiting investor choice, limiting investor access to education regarding retirement accounts, and increased costs for saving. 

After significant objections were raised by SIFMA and numerous other groups, as well as Members of Congress from both parties, the DOL withdrew its initial proposal and stated it would conduct further economic analysis. The proposal would affect millions of IRA holders and plan participants with assets expect to reach $7.3 trillion by 2016. In February 2015, President Obama announced that the DOL should move forward with its proposed rulemaking. On April 14, 2015, the DOL announced a re-proposal of the rule, which is now followed by a 75 day period for public comment.


*See also:
The Fiduciary Standard Debate: SIFMA-Commissioned Reports and a Chronology To Date (April 2015)
SIFMA Fiduciary Standard Resource Center


SIFMA is in the process of thoroughly reviewing  the re-proposed rule and its impact on investors, and will express our views in the public comment period.

SIFMA wants to ensure that the Department of Labor (DOL) proposal does not adversely affect retirement savers, particularly lower and middle income workers in a way that would limit investor choice, cause inconsistencies as different regulators would apply different standards to the same retirement accounts, prohibit access to investor guidance and raise the costs of saving for retirement.  

As the process moves forward, the proposal must be reviewed in detail as it has the potential to cause a detrimental impact on all American savers and the retirement system as a whole. Regulators must consider the fact that the brokerage industry is highly regulated by both the U.S. Securities and Exchange Commission (SEC) and Financial Regulatory Authority (FINRA), including with respect to retirement accounts, and in particular, recent guidance by FINRA with respect to rollovers.


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