401(k) Specialist Issue 3 - 2024 - 8

401(k) FIDUCIARY FILE
Fiduciary Rule Stayed a Second Time
in Texas
TWO DIFFERENT CHALLENGES filed in Federal District Courts in Texas
have now resulted in two different stays of the effective date of the U.S.
Department of Labor's Retirement Security Rule.
The second stay, issued by the Federal District Court for the Northern
District of Texas, means that the regulations will not take effect until the
court rules on the merits of the case brought by trade associations in
American Council of Life Insurers, et. al. v. U.S. Department of Labor, et. al.
The American Council of Life Insurers (ACLI), National Association of
Insurance and Financial Advisors (NAIFA), NAIFA-Texas, NAIFA-Dallas,
NAIFA-Fort Worth, NAIFA-POET, Finseca, Insured Retirement Institute (IRI),
and National Association for Fixed Annuities (NAFA) issued a statement
following the ruling granting the Plaintiffs' motion for a stay of the rule's
effective date.
" We are grateful to the court for its decision to issue a stay halting the
September 23, 2024, effective date of the U.S. Department of Labor's
(DOL) fiduciary-only regulation, the DOL's latest attempt to vastly expand
its statutory authority by imposing fiduciary status on almost every financial
professional who sells retirement products, " the statement begins.
" If allowed to take effect, this rule would deprive millions of consumers
access to much needed retirement financial guidance and protected lifetime
income products, replicating the considerable harm suffered under
a similar 2016 DOL regulation vacated by a federal court in 2018.
" The stay of the effective date provides consumers with a needed
reprieve from these devastating consequences as the court considers the
substantial legal issues we have raised regarding this ill-advised rule, " the
statement concludes.
Department of Labor Appeals Two Stays
on Fiduciary Rule
THE DEPARTMENT OF LABOR (DOL) has filed an appeal to reverse
two federal court stays that halted its Retirement Security Rule, which
was expected to take effect on September 23.
The appeal come after two federal courts issued stays in late July
to delay the implementation of the fiduciary rule. The first stay, granted
on July 26 by U.S. District Judge Jeremy Kernodle of the U.S. District
Court for the Eastern District of Texas, was filed by the Federation
of Americans for Consumer Choice along with several independent
insurance agents.
A second stay was granted the following day by the Federal District
Court for the Northern District of Texas, who blocked the fiduciary
rule from moving forward until it rules on a past lawsuit filed by the
American Council of Life Insurers and eight other insurance organizations,
including the National Association of Insurance and Financial
Advisors (NAIFA), the Insured Retirement Institute (IRI), and the
National Association for Fixed Annuities (NAFA).
While the Department of Labor has filed its appeal, it has yet to
provide its full argument against the plaintiffs. The agency has previ8
ISSUE
3 2024 | 401kSpecialist.com
ously stated its determination to face challenges against the rule, but
it's unclear whether they will succeed or not, experts say. Additionally,
multiple factors, including the outcome of the general election in
November, could influence the rule's success or demise.
© Mykhailo Polenok | Dreamstime.com
© Mykhailo Polenok | Dreamstime.com
401(k) Specialist Issue 3 - 2024

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