2023 Federal Benefits Policy Developments

In 2023, various federal government agencies, including the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS), unveiled four significant rules concerning employee benefits.

DOL's Proposed Fiduciary Rule

In late October, the Employee Benefits Security Administration (EBSA) issued a proposed rule that would change the definition of an investment advice fiduciary under the Employee Retirement Income Security Act (ERISA). EBSA's attempt to update the fiduciary rule comes five years after the U.S. Court of Appeals for the Fifth Circuit struck down its earlier attempt to restructure the rule.

The proposed rule and amendments to the ERISA prohibited transaction exemptions would subject a wider range of interactions between investment advisers and employee retirement plan participants to ERISA's strict conflict-of-interest rules. The proposed fiduciary rule would cut down the DOL's 1975 five-part test to include more professionals and situations,