Who is The New Fiduciary?
The Department of Labor’s (DoL) proposal for a new definition of fiduciary was discussed at the PLANSPONSOR National Conference—and a representative from the DoL was present to add his viewpoint.
Michael Davis, Deputy Assistant Secretary at the DoL, today began by saying how the concept of fiduciary is the core component of the Employee Retirement Income Security Act (ERISA). ERISA was created to protect participants and their assets, he said, and the fiduciary serves as the umbrella for these protections. The original five-part test to determine if one is acting as a fiduciary (the advice is individualized, provided for a fee, provided on a regular basis, pursuant to a mutual understanding between the plan sponsor and adviser, and the advice will form the primary basis for the plan’s decision-making), is being overhauled, Davis said, to better protect plan sponsors—particularly sponsors of smaller plans.
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