The Department of Labor (DOL) has temporarily withdrawn its proposed new definition of a fiduciary under the Employee Retirement Income Security Act (ERISA) of 1974—one that would have embraced even realtors—but still plans to modify and reissue the definition next year.
Under the proposed regulations, a person rendering advice on an ERISA plan would have been treated as a fiduciary if (i) the advice were considered investment advice, (ii) the arrangement were one in which the person was considered to be rendering the investment advice to a plan, and (iii) the person received a fee for such advice.
Those affected in the financial services industry, along with many members of Congress, were so vociferous in opposition to the DOL's new definition that last week the department announced it was withdrawing but then planning to redraw the whole thing.
The new definition expanded the range of financial services covered so broadly that even real estable appraisals and valuations would come under its umbrella.
The Sept. 19 announcement from Labor indicated that the new definition would take into consideration industry and Congressional concerns.