"[In] expanding the situations in which disqualification might happen and in increasing the QPAM's regulatory burden, the changes may in some circumstances and for some sponsors increase the costs of finding and retaining a QPAM and increase the possibility that a current and (from, e.g., the sponsor fiduciary's point of view) perfectly appropriate QPAM relationship may be disrupted."   MORE >>

"The DOL refrained from providing special exceptions or exemptions to platform providers, pooled employer plans (and more specifically, pooled plan providers), and call center employees and instead reiterated that communications would be evaluated based on the general standards of the Final Rule . However, the DOL noted that platform providers that merely identify investment alternatives using objective third-party criteria without additional screening or recommendation would not be providing covered recommendations."   MORE >>

"[T]here will be lawsuits filed to challenge the fiduciary definition. One of the claims will be that the new definition is, as a practical matter, the same as the fiduciary definition for one-time advice in the Obama-era regulation which was vacated by the Fifth Circuit Court of Appeals in 2018. Let's look at the Obama-era definition and the new one. Then you can decide if they are substantially the same."   MORE >>

"While the Final Advice Regulation does not define when a person makes a 'recommendation,' DOL characterized a recommendation as a 'call to action' and indicated that it intends to the term to have a meaning consistent with the SEC's interpretation of the term as used in Regulation Best Interest.... [1] Most distribution recommendations are investment advice and subject to ERISA's fiduciary responsibility provisions ... [2] ERISA's fiduciary responsibility provisions apply to virtually all recommendations to plan participants regarding IRA investments after a rollover even absent a rollover recommendation."   MORE >>

"[T]he 2024 Final Rule expands the universe of entities that would be considered investment advice fiduciaries under ERISA and corresponding provisions of the Code. In order to receive compensation that varies based upon their recommendations, investment advice fiduciaries must find exemptive relief, which PTE 2020-02 supplies.... DOL has made many other exemptions unavailable to investment advice fiduciaries, with the result that PTE 2020-02 largely stands as the only available option for exemptive relief in many cases."   MORE >>

"The final amendments completely abandon the restrictive approach taken under DOL's amendment proposal that would have limited covered compensation to 'Insurance Sales Commissions' ... DOL's preamble commentary indicates that it has retreated from statements made in the proposal and in connection with its 2016 rulemaking effort that compensation covered by PTE 84-24 is limited to so-called 'simple commissions.' " MORE >>

"[P]rograms that rely on PTE 77-4 when providing advice would be required to consider a different compliance framework. Options might include eliminating the fee conflict through an offsetting approach or relying on PTE 2020-02 . Moreover, those relying on PTE 77-4 within discretionary management structure may be forced to rely on PTE 2020-02 when recommending that retirement investors participate in the program and then rely on PTE 77-4 when managing the assets."   MORE >>

"A contentious congressional hearing that was billed as 'examining the policies and priorities of the [DOL]' ended with a member of Congress calling for the resignation of Acting Labor Secretary Julie Su.... [T]he hearing featured few, if any, questions about the SECURE 2.0 Act, and instead featured numerous questions and criticisms about the DOL's recently finalized fiduciary rule[.]"   MORE >>

"[S]electing the strategy with the highest historical returns or the lowest fees as your plan's QDIA won't necessarily prove adherence to the fiduciary's duty of loyalty and prudence.... Suggested data to review include age cohorts, salary levels, account balances, deferral rates and matching programs, employee turnover rate and average tenure, retirement income objectives, availability of other savings (e.g., DB plan) and risk tolerance[.]"   MORE >>

"This study gathered sponsor perspectives on retirement confidence, managing investment lineups in uncertain markets, retirement income and their views on an array of legislative issues and litigation concerns.... Employers and employees are concerned about retirement readiness. Investment lineups are being re-evaluated, including retirement income solutions. 2024 trifecta of employer concerns: litigation, legislation, and a litany of administration."   MORE >>

"As the Boomer retirement wave rolls through the financial services environment, asset managers like BlackRock have trouble controlling their own destinies. They distribute target date funds through retirement plans, but they are DCIO companies. They don't administer plans or offer rollover IRAs to retirees from their plans (as Vanguard, Fidelity and TIAA do). They stand to lose assets when participants retire."   MORE >>

"While the new rule applies primarily to retirement savings plans covered by [ERISA], the news is not all bad for savers in K-12 403(b) plans ... [The rule will] apply to rollovers out of K-12 403(b) plans ... Participants should ask every 'trusted' advisor in the lounge if they will adhere to the new Retirement Security Rule. And if not, why not?"   MORE >>

"The low cost advantage of CIT TDFs is overstated when the costs of underlying funds are excluded. CIT expense reports are not the same as mutual fund expense reports. As it stands now, fiduciaries need to look at the CIT's Participation Agreement -- or specifically ask -- to discover underlying fund fees."   MORE >>

"[T]raining HR and benefits staff to understand the innerworkings of a retirement plan is a vital and ongoing task for employers, especially for those who manage smaller teams made up of mainly generalists who do not have prior retirement-plan experience."   MORE >>

"[T]he legal challenges assert that the Noncompete Rule upends centuries of established contract law as noncompetes have been enforceable contracts since before the Nation's founding. Indeed, enforcement of non-competes has been a feature of English common law since the early 18th century ... This raises the question of whether the purported benefit of the Noncompete Rule to workers and the economy as a whole touted by the Agency outweighs the costs to employers who have long relied on the expectation of enforceable noncompetes to protect their specialized training, investment, and confidential information ... Ultimately, [the authors] believe ... that the FTC's Noncompete Rule is unlikely to be upheld in its current form."   MORE >>

"A change from the proposed rule is that there is an exception for existing Noncompetes with 'senior executives'. A senior executive is an individual earning more than $151,164 in the preceding year who is in a 'policy-making position'.... This narrow definition excludes many highly paid employees such as sales and investment professionals or executives without policy-making authority."   MORE >>

"Existing noncompetes with 'senior executives' who are in 'policy-making positions' with respect to the entire business enterprise and earn more than $151,164 annually remain enforceable.... The Final Rule does not prohibit enforcement of noncompete clauses that are entered into pursuant to a bona fide sale of a business entity.... The Final Rule's definition of senior executive is significantly narrower than similar concepts in other legal regimes that govern executive compensation."   MORE >>