The Federal District Court for the Middle District of Florida vacated the Department of Labor’s (DOL’s) interpretation of ERISA and its implementing regulation on fiduciary investment advice by invalidating the DOL’s guidance interpreting the “regular basis” prong of the regulation’s so-called five-part test.
The court claimed that the DDOL’s interpretation was arbitrary and capricious. The court stated that the DOL’s interpretation did not take into account the language of ERISA and the fiduciary advice regulation, which provides that fiduciary status is determined based on whether the advice is given regularly to the retirement plan out of which the assets are being rolled (a 401(k) plan), not necessarily to the plan into which the assets are being moved (an IRA).
