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 DOL proposed a change to the definition of fiduciary under 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 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. 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 was followed by a period for public comment. The DOL received 3,530 substantive comment letters on its proposal - more than ten times the amount it received in 2010. In addition, nearly 300 Members of Congress raised concerns regarding the proposal. On January 28, 2016, the DOL sent the final rule to the Office of Management and Budget (OMB). The final rule was published on April 6, 2016.
SIFMA Fiduciary Standard Resource Center
Together with the U.S. Chamber of Commerce, Financial Services Institute, Financial Services Roundtable, Greater Irving-Las Colinas Chamber of Commerce, Insured Retirement Institute, Lake Houston Area Chamber of Commerce, Lubbock Chamber of Commerce and Texas Association of Business, SIFMA has filed a legal challenge to the Department of Labor’s fiduciary standard of conduct rule for brokers and registered investment advisors serving people with Individual Retirement Accounts (IRAs) and 401(k) plans. We look to the courts to strike down this over-reaching federal regulation that will restrict hardworking Americans’ access to retirement advice and planning services.
Since early 2009, SIFMA has consistently advocated for the establishment of a uniform fiduciary standard for financial professionals when providing retirement advice. We continue to support such a standard under the industry's primary regulator, the U.S. Securities and Exchange Commission. Unfortunately, this lawsuit is necessary to protect retirement savers from the Department of Labor's misguided rule that makes saving for retirement more difficult for the very same savers it seeks to protect.
SIFMA Comment Letters and Studies
Best Interests Standard for Broker-Dealers