July 5, 2018

Fiduciary Investment Advice Rules – The Final Chapter (article)

The DOL’s Employee Benefits Security Administration (EBSA) fiduciary investment advice rules have officially been declared null and void.  The U. S. Fifth Circuit Court of Appeals rendered a judgement in the form of a mandate on June 21, 2018 in the matter of Chamber of Commerce v. U.S. Dep’t of Labor (2018 WL 1325019, 5th Cir. 2018).  The Court’s judgement vacates EBSA’s fiduciary investment advice rules that would have expanded ERISA's definition of fiduciary and the related prohibited transaction exemptions. 

This means that the fiduciary standards now return to ERISA’s five-part prior rule standards for defining fiduciary and investment advice.  Under these rules, an individual could be deemed a fiduciary if, for a fee, he/she (1) provides advice or makes recommendations on investments, (2) on a regular basis, (3) in accordance with a mutual agreement or understanding that the advice, (4) would serve as the primary basis for investment decisions, (5) that would be individualized to the particular needs of the plan.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. 

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