Long-Awaited DOL Fiduciary Final Rule Released Today

As background, on April 14, 2015, the U.S. Department of Labor (the "DOL") released a proposed rule to revise the definition of "investment fiduciaries" under the Employee Retirement Income Security Act of 1974 ("ERISA"). Today, the DOL finally released the long-awaited final rule. The rule requires investment advisers to act in the best interests of participants and beneficiaries in retirement plans (e.g., 401(k) plans, etc.) and individual retirement accounts ("IRAs").

According to the DOL, the purpose of the revised rule is to update (i.e., modernize) the "historic" fiduciary investment advice rules and regulations that were adopted with ERISA's inception in 1974 and prior to the predominance of 401(k) plans and IRAs. The DOL felt that many financial advisers were providing advice that resulted in a failure to act solely in the interest of plans, participants, and beneficiaries.