05.15.23
DOL Drops Rollover Appeal
by: Melanie Waddell
The U.S. Department of Labor (DOL) dismissed its appeal of a ruling against its guidance that stipulated that rollover advice was fiduciary advice. A federal court struck down the guidance in February, ruling that DOL’s interpretation of the five-part test setting out who qualifies as a fiduciary under the Employee Retirement Income Security Act (ERISA) was “arbitrary and capricious.” The case was brought in February last year by the American Securities Association in the Middle District of Florida, challenging “Labor’s attempt to change existing retirement rules without going through a notice-and-comment rulemaking as is required under the Administrative Procedure Act.” Labor’s guidance stated that a financial advisor’s one-time recommendation to roll over retirement assets may be subject to ERISA fiduciary duties.
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