Issue link: https://viewer.e-digitaledition.com/i/674833
FOR ALL EMPLOY ER S t hat sponsor retirement pla ns, ma ke sure you continue to stay current on pot ent ia l cha n ges w it h respec t t o who m ay be considered f iducia r ies of your pla n. A f ter more tha n f ive yea rs of debate as to the direction of the meaning of an investment advice "f iduciar y " under Section 3(21) of the Employee Retirement Income Securit y Act of 1974 (ER ISA), the United States Depa r tment of Labor (DOL) is moving a head with its attempt to broaden its scope by redef ining the current f ive-pa r t test. Currently, the f ive-pa r t test looks at whether a person provides investment advice (1) for a fee; (2) on a reg ular basis; (3) pursuant to a mutua l agreement, arrangement or understanding between such person a nd the pla n or a pla n f iducia r y; (4) that ser ves as a prima r y basis for investment decisions; a nd (5) that is ta ilored to the pa r ticula r needs of the pla n. The DOL w i l l look to ma ke cur rent f i na ncia l intermedia ries f iducia ries due to concerns that many are providing conf licting advice to your plan's retirement plan participants. In order to broaden the fiduciary meaning, the proposed changes would no longer require investment advice to be g iven on a "reg ula r" basis or as the "prima r y " basis for recipient's decision and would only require an under- standing that the advice is directed to the recipient or, in this case, the plan participant. Moreover, the rule would impose a " best interest standard" that would require fiduciaries to act in the best interest of their clients when o–ering investment advice. Remember, the proposed rules broaden the scope for the number of f iducia ries w ith respect to the plan, but your f iduciar y duties as a plan administra- tor or na med f iducia r y rema in the sa me. NOTE: T his general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice. Lucas Murray is an attorney with the law firm of Krugliak , Wilkins, G rif fiths & Dougherty Co., LPA in Canton , Ohio. ■ for Retirement Plan Investment Fiduciaries BY LUCAS W. MURRAY, ESQ. POTENTIAL CHANGES M D N E W S . C O M /// M D N E W S C L E V E L A N D /A K R O N / C A N T O N n M AY/J U N E 2 016 L E G A L E A S E 3 1