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As we previously reported in our Legal Update, in April 2016 the U.S. Department of Labor (“DOL”) replaced its 1975 regulation that set the parameters for determining when a person should be treated as a fiduciary under ERISA when providing advice with respect to investment matters (the “Fiduciary Rule”).  The new definition treats persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA as fiduciaries in a much wider array of relationships than was true under the 1975 regulation. In connection with the publication of the new Fiduciary Rule, the DOL also published two new administrative class exemptions from the prohibited transaction provisions of ERISA and the Internal Revenue Code—the BIC Exemption and the Principal Transactions Exemption—as well as amendments to PTE 84-24, commonly relied upon for the sale of insurance contracts to ERISA plans.  As discussed in the Legal Update, just as plan fiduciaries geared up for these major changes, the DOL began to back peddle as a result of the change in administration and new leadership at the DOL. So where are we now? Continue Reading DOL Fiduciary Rule Update – Where Are We Now?

A collective investment trust (“CIT”) is a longstanding vehicle used by banks and trust companies to commingle the assets of qualified retirement trusts for investment.  In recent years, CITs are enjoying a resurgence for defined contribution plans as an alternative to mutual funds in a 401(k) plan line up. The primary reason for the new popularity of CITs is that they often have a lower expense ratio than mutual funds as a result of being free from the extensive regulatory requirements imposed on mutual funds under the securities laws.  But there are many other differences between CITs and mutual funds that plan fiduciaries should understand when adding an investment option structured as a CIT to their 401(k) plan line up.  This blog provides a number of examples of issues that plan fiduciaries who are not familiar with CITs could miss. Continue Reading Collective Investment Trusts – What DC Plan Fiduciaries Should Know