Game Changers: The DOL and SEC Fiduciary Rules

The Department of Labor (DOL) on April 23, 2024, released its final Retirement Security Rule—also called the Fiduciary Rule—defining an investment advice fiduciary for purposes of Title I and Title II of ERISA.

The final rule defines when a person is a fiduciary in connection with providing advice to an investor saving for retirement through a workplace retirement plan or other type of retirement plan such as an IRA. Such retirement investors include participants and beneficiaries in workplace retirement plans, IRA owners and beneficiaries, as well as plan and IRA fiduciaries with authority or control with respect to the plan or IRA.

Noting that the rule will “protect the millions of workers who are saving for retirement diligently and rely on advice from trusted professionals on how to invest their savings,” the DOL anticipates that the most significant benefits of the final rule and amended prohibited transaction exemptions (PTEs) will stem from the application of ERISA’s fiduciary protections under Title I and Title II and PTE conditions to all covered investment advice provided to retirement investors.

A proposed rule and proposed amendments to the PTEs were released by the Department on Oct. 31, 2023, for notice and public comment, and public hearings on the proposals were held on Dec. 12 and 13, 2023. The Department notes that it has made certain changes and clarifications in the final rule in response to public comments on the proposal and the testimony presented at the public hearings.

The final regulation and related guidance were published in the Federal Register on April 25, 2024. The regulation becomes effective Sept. 23, 2024.

Among other things, the guidance is also intended to complement and enhance the Securities and Exchange Commission’s regulatory guidance package issued on June 5, 2019, establishing a new fiduciary standard for broker-dealers and investment advisors. The SEC initially proposed that rules package in April 2018.

Below you’ll find links to the DOL and SEC fiduciary rules, as well as recent NAPA news coverage and other recommended resources.

Updated May 10, 2024