US Department of Labor restores long-standing investment advice rule after pair of court decisions vacate 2024 retirement security rule

News Release

US Department of Labor restores long-standing investment advice rule after pair of court decisions vacate 2024 retirement security rule

WASHINGTON - The U.S. Department of Labor's Employee Benefits Security Administration today removed from the Code of Federal Regulations the Biden-era 2024 final rule, "Retirement Security Rule: Definition of an Investment Advice Fiduciary," responding to final judgments entered in the Northern and Eastern Districts of Texas vacating the rule.

The vacatur notice in the Federal Registerreflects the judicial resolution of legal challenges to the 2024 final rule and to amendments of associated prohibited transaction exemptions and restores the Employee Retirement Income Security Act's five-part test for determining whether a person is an investment advice fiduciary.

In July 2024, two federal district courts stayed the implementation of the 2024 final rule and the amendments to the associated PTEs, and final judgments have now been entered in both cases, vacating the 2024 final rule and PTE amendments.

"The challenged regulation wrongly sought to impose ERISA fiduciary status on securities brokers and insurance agents when there was not a relationship of trust and confidence," said Assistant Secretary of Labor for Employee Benefits Security Daniel Aronowitz. "The Securities and Exchange Commission and state regulators regulate the activities of securities brokers and insurance agents and will continue to do so."

The department has no current plans to engage in notice and comment rulemaking in this regard and remains focused on its core mission, redoubling its efforts to make employer-based U.S. retirement plans the strongest and most innovative in the world. The department will consider whether any additional guidance, including transitional or non-enforcement relief, is appropriate.

EBSA ensures the security of retirement, health, and other job-based benefits for American workers and their families. The agency is responsible for protecting more than 156 million workers, retirees, and their families, who are covered by approximately 2.6 million health plans, 801,000 private retirement plans, and 514,000 additional welfare benefit plans. Together, these plans hold about $13.8 trillion in assets.

Employers and workers can contact EBSA at askebsa.dol.govor call 866-444-3272 toll-free for help with private sector job-based retirement and health plans.