PLANADVISER Weekend Newsdash
Week ending September 13th, 2019

For the casual observer, the shifting tangle of laws and regulations governing the behaviors of retirement plan fiduciaries can seem almost comically complex. For industry practitioners, wrestling with regulatory compliance is a daily battle, and one with potentially dire personal and professional consequences. Below you will find a roundup of significant regulatory events from 2019. We hope you’ll share some of what you read with a client or colleague.

Editor's choice
Fiduciary Advisory Firms Sue to Block SEC’s Reg BI
Two advisory firms argue they are harmed by the “best interest” rule because it causes them a competitive disadvantage with respect to broker/dealers, and because the rule will increase rather than abate investor confusion. Read more >
State AGs’ Lawsuit Just One Part of Broader Fiduciary Fight
There is an all-out regulatory tug of war going on between consumer groups, the brokerage industry, the states and the SEC. Read more >
SEC Complaint Dissects Fee-Based Firm’s Revenue Sharing Strategy
The Securities and Exchange Commission takes issue with revenue sharing tied to a preferred broker’s “transaction fee” program, underscoring how fee-based advisers are not immune from allegations of conflicts of interest. Read more >
SEC Shakes Up the Proxy Voting Landscape
The Investment Adviser Association says the SEC’s proxy voting guidance will increase costs for advisers and also increase barriers to entry for proxy advisory firms.   Read more >
DOL Sends Electronic Disclosure Rule to OMB
The proposed rule, which the OMB has up to 60 days to review is aimed at reducing costs and improving participant understanding of retirement plan disclosures. Read more >
Corrections Made to ‘One-Bad-Apple’ Rule Proposal for MEPs
In July, the IRS proposed regulations that would provide an exception, if certain requirements are met, to the application of the “unified plan rule,” what the industry refers to as the “one-bad-apple rule,” for MEPs. Read more >
MOST POPULAR STORIES
$300 Million Plan Faces ERISA Fiduciary Breach Lawsuit

The plan being challenged in the latest fiduciary breach lawsuit held less than $300 million as of the start of last year, making it one of the smallest to become the target of an ERISA complaint.

Three New ERISA Lawsuits Bash Actively Managed TDFs

Three new lawsuits question the offering of actively managed target-date funds to retirement plan participants.

Another Lawsuit Challenges Use of Untested CITs in 401(k) Plan

A similar lawsuit was filed in May against an investment manager and a different plan sponsor.

DOL Aims to Quickly Simplify Conflict of Interest Framework

The main theme of the new fiduciary rule proposal is alignment with other regulators—the SEC and FINRA in particular—but the agency is by no means surrendering its jurisdiction over tax-qualified retirement plans.

Warn Your Clients: Don’t Abuse Coronavirus Hardship Withdrawals
Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.
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