Fred Reish Provides Insight on DOL’s Proposed Fiduciary Definition Changes With Pensions & Investments

In “DOL faces uphill climb with new fiduciary standard rule proposal,” Pensions & Investments quoted benefits and executive compensation partner Fred Reish on the Department of Labor’s (DOL) new rule proposal to amend the definition of the term “fiduciary.”

The publication reported that in 2018, a three-judge panel at the 5th U.S. Circuit Court of Appeals in New Orleans vacated the rule in a 2-1 decision, saying the DOL exceeded its legal authority. According to Reish, the judges in that decision ruled against the department in part because they didn’t buy that there could be fiduciary status established when there wasn’t a relationship of trust and confidence between an adviser and client. He added that the judges thought that a sales pitch was not a relationship of trust and confidence and that participants would know that.

Reish said a lawsuit challenging the proposal is almost guaranteed, and if Biden wins re-election next year, the case could ultimately be decided by the U.S. Supreme Court. He also noted that when the 5th Circuit decision was handed down in 2018, the Trump administration did not appeal the decision.

The full article is available for Pensions & Investments subscribers.