DOL Fiduciary Rule Halted by Texas Court
“Plaintiffs are insurance agents who sell annuities and other products to clients rolling over their retirement investments from employer-provided plans (such as 401(k)s) into IRAs,” the descision states. ”They argue that the 2024 Rule conflicts with [the Employee Retirement Income Securiy Act] by imposing ERISA-fiduciary status on ‘any insurance agent who merely complies with state insurance laws when dealing with an ERISA plan member or owner of an [IRA].’”
And “complying with the Rule while this lawsuit is pending, they argue, will subject them to ‘significant compliance burdens, … potential liability under ERISA, and potential enforcement actions by DOL,’” the decision continues.
The plaintiffs, the ruling states, “are likely to succeed on the merits of their claim because the 2024 Fiduciary Rule conflicts with ERISA in several ways, including by treating as fiduciaries those who engage in onetime recommendations to roll over assets from an ERISA plan to an IRA.”
DOL’s related amendments to Prohibited Transaction Exemption 84-24 “are also unreasonable and arbitrary and capricious,” the decision states.
