On October 31, 2023, the US Department of Labor (DOL) released its Proposal 4.0 regarding the Employee Retirement Income Security Act (ERISA) fiduciary investment advice, following its announcement by President Biden. The Proposal includes amended exemptions for conflicted investment advice, expanding upon the concepts of Rule 2.0 that the DOL adopted in 2016. Noteworthy is the fact that the Fifth Circuit Court of Appeals vacated Rule 2.0 in 2018, a potential point of contention as the proposal moves forward.
The Proposal 4.0 package consists of a proposed, new regulation defining fiduciary investment advice in addition to several amendments. The development suggests significant movement within the regulatory landscape, dictating a turn in direction for law professionals working closely with corporate fiduciaries. An understanding of these changes might help inform strategic management and compliance among organizations.
Detailed information on the Proposal 4.0, including its wider implications and industry feedback, is available on the original piece released by Eversheds Sutherland (US) LLP. Find a direct link to this piece here.
The constant changes seen in this space are another reminder for legal professionals, in law firms and corporations alike, that continual diligence, analysis, and anticipation of impending regulation amendments is critical for the well-being and resilience of their respective organizations. Close attention to the DOL’s progress in solidifying Proposal 4.0 should be a priority for those practicing in fiduciary and ERISA legal realms.