US judge blocks latest version of labor department's fiduciary rule

Source: Reuters

July 26, 2024 1:07 PM EDT Updated 7 hours ago


WILMINGTON, Delaware, July 26 (Reuters) - A U.S. judge has blocked a Department of Labor rule from taking effect that would have expanded the types of retirement advisers who are considered fiduciaries, finding the rule was arbitrary and conflicted with a law that governs retirement plans.

The rule, unveiled in April as the "Retirement Security Rule," was challenged by insurance groups who argued it conflicted with ERISA, or the Employee Retirement Income Security Act. Judge Jeremy Kernodle in Tyler, Texas, said in a Thursday ruling that the Federation of Americans for Consumer Choice Inc and other insurance groups were likely to prevail in their arguments.

He blocked the rule nationally from taking effect on Sept. 23 while the lawsuit plays out. The insurance groups had argued the rule improperly treated as fiduciaries those who provide one-time recommendations to retirees, such as for rolling over investments from an ERISA plan to an individual retirement account, or IRA. The Labor Department said in a statement that the rule ensures retirement savings advice is in the best interest of the customer, not of the financial professional.

"The department continues to believe that this rule is essential to ensuring that retirement investors are protected," the DOL statement said. The rule was meant to close a loophole in the fiduciary standard that did not apply to recommendations for purchases of non-securities such as fixed index annuities, which are typically sold by insurance companies, according to the White House.

Read more: https://www.reuters.com/legal/us-judge-blocks-latest-version-labor-departments-fiduciary-rule-2024-07-26/

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And one might not need to even bother to guess WHERE that Judge is assigned and who appointed hm.