DOL Fiduciary Rule

Since 2010, the Department of Labor (DOL) has attempted on several occasions to update its rules governing the provision of investment advice to participants in employer-based retirement plans and owners of individual retirement accounts. After its initial effort in 2010 was withdrawn in response to overwhelming opposition from the industry and Congress, the DOL adopted a package of rule changes in 2016. Several lawsuits were brought to challenge the 2016 rule, and in 2018, the 5th Circuit Court of Appeals vacated that rule in its entirety. 

Following the 5th Circuit decision, federal and state regulators adopted significant enhancements to their consumer protection rules. The Securities and Exchange Commission (SEC) adopted Regulation Best Interest (Reg BI) in 2019 to impose a best interest standard on all securities recommendations made by broker-dealers and their registered representatives, and in 2020, the DOL established PTE 2020-02 to provide relief from ERISA’s prohibited transaction rules for investment advice fiduciaries who, among other things, meet a best interest standard that aligns with Reg BI. Also in 2020, the National Association of Insurance Commissioners (NAIC) amended Model Regulation #275 to impose a best interest standard on recommendations of annuities by state-licensed insurance producers.  

Despite these enhancements, the DOL undertook another effort to amend its rules governing fiduciary investment advice in 2023, culminating in the adoption of the so-called “Retirement Security Rule” in April 2024. This Rule included substantial and problematic amendments to the definition of fiduciary investment advice as well as PTE 84-24, PTE 2020-02, and several other related PTEs. Following issuance of the final rule, IRI launched the DOL Fiduciary Rule Implementation Program to support and assist member company efforts to prepare for compliance with the final rules.   

Concurrent with our implementation efforts, IRI and a coalition of industry groups filed a lawsuit against the DOL in May 2024 to challenge the validity of the final rule, and in July, the court issued a stay of the effective date applicable to the entirety of the rulemaking package. IRI’s DOL Fiduciary Rule Implementation Program is now on hold pending the outcome of the litigation.  

IRI’s Standard of Conduct Working Group guides our work with respect to the DOL fiduciary rule. Please visit your IRI account to sign up for the Standard of Conduct Working Group. For assistance joining the Working Group or to learn more about IRI’s efforts and activities in this space, please contact any member of the IRI Regulatory Affairs Team