DOL Fiduciary Rule Endangers Advice to IRA Accounts
May 12, 2011 by N/A
May 5, 2011On October 22, 2010, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) proposed a rule that would eliminate your ability to earn commissions on IRA accounts and other retirement accounts. The proposal would do so by amending the definition of “fiduciary” for purposes of the Employee Retirement Income Security Act of 1974 (ERISA) and section 4975 of the Internal Revenue Code of 1986 (Code). The proposal would broadly define the term as a person who provides investment advice to plans for a fee or other compensation. The DOL’s proposal would reverse 35 years of case law and enforcement policy by eliminating the existing bright line regulatory test and replacing it with a regulatory structure that presumes persons to be an ERISA fiduciary. The DOL proposal does so in an effort to ensure that Individual Retirement Account (IRA) investors and participants in ERISA retirement plans (Covered Plans) receive advice based on reliable information that protects their interests. Unfortunately, the DOL’s proposal will have significant unintended consequences by limiting access to retirement advice and service for the 19 million IRA account holders and participants in the more than 600,000 Covered Plans who are responsibly planning for their retirement.
Click here to read FSI’s briefing on this issue.