Fred Reish, well-known among advisors as the ERISA guru, recently predicted areas of “relief” that the Department of Labor’s Employee Benefits Security Administration will provide when it reproposes its rule amending the definition of fiduciary early next year.
Phyllis Borzi, assistant secretary for EBSA, announced Oct. 25 that the administration would repropose its controversial rule amending the definition of fiduciary under ERISA “shortly after the first of the year.”
Reish (left), partner and chair of the Financial Services ERISA Team at Drinker Biddle & Reath in Los Angeles, says the decision to repropose the rule is a “victory for the private sector and particularly for insurance companies and broker-dealers who objected to a number of provisions in the initial proposal.” However, he says, “the victory may be limited” as DOL will likely provide relief “on certain issues, but not on others.”
As Borzi noted on Oct. 25, the basic structure of the proposal will remain in place. As Reish notes, while “a broad revision of the regulation” is unlikely, “there will be ‘adjustments’ to deal with specific issues.”