The US Department of Labor's Employee Benefits Security Administration has proposed a rule that would expand who may be considered a "fiduciary" to an employee benefit plan. The proposed rule would amend regulations that determine when a person providing investment advice becomes fiduciary subject to ERISA, by more broadly defining the term as a person who provides investment advice to plans for a fee or other compensation. This new definition would sweep in advisers who provide advice to plans on a one-time, or one-off, basis, as well as advisers who do not serve as a plan's primary adviser, including subadvisers.
According to the release, the existing "rule's approach to fiduciary status may inappropriately limit the department's ability to protect plans, participants and beneficiaries from conflicts of interest that may arise from today's diverse and complex fee practices in the retirement plan services market. The proposed rule is designed to remedy this limitation, and protect plan officials and participants who expect unbiased advice, by giving a broader and clearer understanding of when individuals providing such advice are subject to ERISA's fiduciary standards."
Comments on this rule proposal are due within 90 days of the proposal's publication in the Federal Register, presumably late January, 2011.
The full text of the DOL's announcement, as well as a link to the rule proposal, is available at: http://www.dol.gov/ebsa/newsroom/2010/10-1472-NAT.html