Happy Friday, readers! It seems hardly a week goes by during which the Department of Labor fiduciary rule doesn’t dominate the retirement industry trade press headlines. That was clearly the case this week, with the emergence of a new rule proposal aiming to delay implementation of the tighter conflict of interest standards championed by former President Barack Obama. Find our full coverage below—along with the latest features and research from our bimonthly print magazine.
Even if the DOL leadership under President Trump declines to enforce a strict fiduciary standard, private litigators will undoubtedly pick up any slack if the administration fails to fully eliminate the Obama-era conflict of interest rulemaking.
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Recent months have seen a wave of new litigation, against several large 403(b) plans maintained by prominent private universities. The lawsuits, which claim breaches of fiduciary duties under the Employee Retirement Income Security Act, are in some respects similar to 401(k) fee litigation cases. However, other aspects of these suits are relatively novel.
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New rules established by Congress and the IRS simplify the process for participants to request a hardship withdrawal of DC plan assets; some experts say this could increase “leakage,” while others anticipate more positive effects, such as lower debt among cash-strapped participants.
The number of Department of Labor investigations of financial advisers has steadily increased over the years; here is a primer on the DOL’s sources of authority, and what to expect when examiners come knocking.
ERISA attorneys and plan design consultants say they are hearing more questions from sponsors about using managed accounts as a plan’s default investment, but the most common use case remains opt-in managed accounts.