DOL Fiduciary Survives Another Legal Challenge
The U.S. Court of Appeals for the D.C. Circuit has denied The National Association for Fixed Annuities’ request for an emergency preliminary injunction to prevent the Department of Labor’s fiduciary rule from taking effect pending their appeal.
In an order issued on Thursday, circuit judges Karen LeCraft Henderson, David S. Tatel and Sri Srinivasan, denied NAFA’s request, stating, “the appellant has not satisfied the stringent requirements for an injunction pending appeal.”
NAFA filed a notice of appeal last month following a decision by judge Randall Moss who rejected the association’s arguments and granted the Department of Labor’s cross-motion for summary judgement. NAFA, which originally filed its lawsuit in June, sought a preliminary injunction to delay the implementation of the rule, as well as a ruling to vacate and set aside the fiduciary rule in its entirety.
“The overarching question is whether DOL can engage in such far-reaching rulemaking, well outside its area of expertise, to create requirements with enormous economic implications that exceed anything Congress contemplated in enacting ERISA,” NAFA said in a reply filed with the appeals court last Friday.
The fiduciary rule redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974. All who provide retirement investment advice to plans, plan fiduciaries and IRAs are required to abide by a new fiduciary standard that goes into effect on April 10th.
“With every passing day NAFA members are incurring excessive and unrecoverable expenses as they attempt to navigate the rule’s byzantine compliance regime. Moreover, we are extremely concerned about how quickly consumers may face an environment in which they no longer have access to the products and professional advice needed to retire with confidence,” said Chip Anderson, NAFA’s executive director.
Five lawsuits challenging the fiduciary rule remain to be decided.
NAFA is a trade association founded in 1998 that consists of insurance companies, agencies, agents and affiliated persons who provide fixed annuities.
