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DOL Fiduciary News: May 22, 2017

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Democratic senators criticize Acosta for rushing to conclusion on DOL fiduciary rule

InvestmentNews; May 19, 2017 @ 2:14 pm

Three Democratic senators who sit on the committee with jurisdiction over the Labor Department criticized Secretary Alexander Acosta on Friday for appearing to jump to a conclusion about the agency's fiduciary rule.

In a letter to Mr. Acosta, Sen. Patty Murray, D-Wash. and ranking member of the Senate Health Education Labor and Pensions Committee, referenced a report on the website of the National Association of Plan Advisors that indicated that Mr. Acosta had made a priority of freezing the regulation in a way that the halt would "stick."

"The definitiveness of your statements, after merely three weeks as secretary, gives us reason for serious concern," Ms. Murray wrote along with two committee colleagues, Sens. Elizabeth Warren, D-Mass., and Cory Booker, D-N.J. "Instead of meeting with all stakeholders and considering multiple points of view, you appear to have prejudged the outcome of the review your agency was tasked with conducting. In fact, it seems as though you have already arrived at your decision."

NAFA Presses DOL to Use Procedures Law to Delay Fiduciary Rule

ThinkAdvisor; May 19, 2017

With only three weeks until the Labor Department’s fiduciary rule is set to kick in, the National Association for Fixed Annuities continues its full-court press in urging Labor to further delay the rule.

Eric Marhoun, chairman of NAFA’s DOL steering and litigation committee, who’s also executive vice president and general counsel for Fidelity & Guarantee Life in Des Moines, told ThinkAdvisor in a Friday interview that "based on recent conversations and meetings with representatives of the administration and Congress, it is my impression that the administration is considering all options for further delaying the DOL rule, including an interim final rule or Section 705 relief – which I believe to be the top choices for delay at this point.”

While other industry trade groups have been pushing Labor Secretary R. Alexander Acosta to adopt an interim final rule to bypass comment period restrictions, NAFA is pressing Acosta to consider invoking a provision of the Administrative Procedures Act known as Section 705, which allows delay of any administrative action that is being challenged in court.

How 401(k) advisers can bullet-proof themselves against litigation risk under DOL fiduciary rule

InvestmentNews; May 20, 2017 @ 12:01 am

Many advisers who service 401(k) plans will, for the first time, be considered fiduciaries with respect to their investment advice when the Labor Department's conflict-of-interest rule comes into force next month.

Along with that heightened standard comes litigation risk for retirement plan advisers, as well as those advising 401(k) participants on rollovers to individual retirement accounts.

"Under the rule, it's pretty hard not to be a fiduciary," said Brian Graff, executive director of the National Association of Plan Advisors. "Relative to today, after June 9 there's definitely more litigation risk. For 401(k) plans it's not academic anymore. It's very real."

To a certain degree, it's impossible for advisers to completely bulletproof themselves against litigation. But knowing how to mitigate risks, keeping stringent documentation and being aware of major problem areas are keys to prevention.

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