ERISA LAW
UPDATE
continued
ABOUT THE AUTHOR
Evelyn Haralampu — Partner
Labor, Employment & Employee Benefits
617.345.3351 | eharalampu@burnslev.com
Evelyn advises on employee benefi ts,
ERISA, executive compensation,
medical privacy, federal health reform
and related tax law. She writes and
speaks extensively and has authored
"ERISA Liability," in the MCLE treatise
Massachusetts Employment Law.
She is a member of the Tax Section of
the American Bar Association and
has been a contributing member of
its subcommittee on Government
Submissions. Recently, Evelyn’s article
“Supreme Court’s Evolution in Defining
Equitable Remedies Under ERISA” was
featured in Bloomberg’s BNA Benefits
Practitioners’ Strategy Guide.
LABOR, EMPLOYMENT &
EMPLOYEE BENEFITS PRACTICE
Clients rely on us for advice on all
aspects of the employment relationship,
from pre-hiring considerations through
separations, layoffs and terminations.
We counsel employers on strategies for
maximizing the effectiveness of their
human resource function by avoiding
litigation, while navigating the maze of
state and federal regulations now
governing employers' actions.
We assist our clients in developing
policies and procedures that assure
compliance with governing laws and
contracts. In addition, we develop and
implement effective training programs
for managers and staff.
To learn more about our Labor,
Employment & Employee Benefits
practice, visit burnslev.com.
NO CHANGE BY TRUMP:
FIDUCIARY REGULATIONS STILL
EFFECTIVE IN APRIL
On April 8, 2016, the U.S. Department of Labor (DOL) issued final
regulations intended to protect the public from certain practices of the
financial industry that adversely affect retirement plan investments. The
regulations hold financial advisers to a high fiduciary standard when
selling products for retirement accounts. Instead of a “buyer beware”
marketplace, the DOL has required that financial advisers act in the
consumer’s best interest when selling investments for a retirement
account. Persons held to the new standards include brokers, consultants
and valuation firms that previously had little legal accountability toward
retirement accounts.
The final regulations are designed to curb the often undisclosed amounts
(such as commissions on insurance) that advisers have been taking on
sales of investments to retirement vehicles such as IRAs and 401(k)
accounts. By assigning fiduciary responsibility to dealers recommending
investments to retail retirement accounts, the regulations seek to prevent
excessive charges to the public on investments which are not in their
best interests.
Not unexpectedly, the financial industry objected to new rules that upset
an old profit model.
The final regulations, as originally published almost a year ago, are
operative as of April 10, 2017.
On February 3, 2017 President Trump issued a memorandum directing
the Secretary of the DOL to determine whether the new fiduciary
regulations impair the public’s access to retirement information and
financial advice.
Specifically, the memorandum requires the DOL to assess whether the
public is apt to be harmed by any reduction in its access to certain
retirement savings offerings, information or advice, and whether the
regulations are likely to increase litigation and prices that investors and
retirees must pay for retirement services. If so, then the DOL is directed
to rescind or revise the rule. If it alters the regulation, the DOL must
adhere to the Administrative Procedures Act which is designed to
protect the public’s due process rights in rulemaking by providing the
public notice and a comment period.
FEBRUARY 2017
