Experiential Wealth

5th Circuit of Appeal Vacates the Fiduciary Rule

Mar 15, 2018 | Plan Sponsors, Regulations

The U.S. Chamber of Commerce (“COC”), the Indexed Annuity Leadership Council (“IALC”) and the American Council of Life Insurers (“ACLI”) (“Plaintiffs”) brought a lawsuit to challenge three rules published by the Department of Labor (“DOL”) on April 8, 2016. On February 8, 2017, the U.S. District Court for the Northern District of Texas, granted summary judgment in favor of the DOL. The Plaintiffs then appealed the decision, and on March 15, 2018, the majority of the 5th Circuit concluded that “the DOL exceeded its regulatory authority by implementing the regulatory package that included a new definition of investment-advice fiduciary and both modified and created new exemptions to prohibited transactions is premised on an erroneous interpretation of the grant of authority given by Congress under ERISA and the Code. I would hold that the DOL acted well within its regulatory authority—as outlined by ERISA and the Code—in expanding the regulatory definition of investment-advice fiduciary to the limits contemplated by the statute, and would uphold the DOL’s implementation of the new rules.”

Please find here the Dallas District Court order and the 5th Circuit Court Appeal decision.