The U.S. Department of Labor announced on March 18 that it has removed the 2024 final rule defining an investment advice fiduciary from the Code of Federal Regulations, following federal court decisions vacating the rule.
The department’s Employee Benefits Security Administration said that the action restores the Employee Retirement Income Security Act’s five-part test for determining fiduciary status. The move comes after final judgments in both the Northern and Eastern Districts of Texas vacated not only the 2024 final rule but also amendments to associated prohibited transaction exemptions. In July 2024, both courts stayed implementation of these rules and amendments, leading to their formal removal.
"The challenged regulation wrongly sought to impose ERISA fiduciary status on securities brokers and insurance agents when there was not a relationship of trust and confidence," said Assistant Secretary of Labor for Employee Benefits Security Daniel Aronowitz. "The Securities and Exchange Commission and state regulators regulate the activities of securities brokers and insurance agents and will continue to do so."
The department indicated it does not plan further notice-and-comment rulemaking regarding this issue at present but will consider whether additional guidance, including transitional or non-enforcement relief, is appropriate. EBSA continues its mission to ensure security for retirement, health, and other job-based benefits for American workers and their families. The agency oversees protections for more than 156 million workers, retirees, and family members across approximately 2.6 million health plans, 801,000 private retirement plans, and 514,000 welfare benefit plans with about $13.8 trillion in assets.
In related actions supporting workplace programs, on August 24, 2022, the Department of Labor announced $3.4 million in Women in Apprenticeship and Nontraditional Occupations grants administered by its Women’s Bureau and Employment and Training Administration. Phoenix, Arizona received $542,358 through the Fresh Start Women’s Foundation.
Employers or workers seeking assistance with private sector job-based retirement or health plans can contact EBSA at askebsa.dol.gov or call toll-free at 866-444-3272 according to the official roster page.
