Labor Dept., Annuities Group Drop Fiduciary Rule Appeal

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

The last ongoing legal challenge to the Labor Department’s fiduciary rule won’t be moving forward, as the rule remains in limbo.

The DOL and the National Association for Fixed Annuities stipulated and agreed to the “voluntary dismissal” of the appeal pending in the U.S. Court of Appeals for the District of Columbia Circuit, according to papers filed March 23.

The request comes one week after the Fifth Circuit vacated in its entirety the Obama-era rule that sought to regulate the financial advice given to retirement savers. The Fifth Circuit held that the controversial rule exceeded the regulatory authority the DOL has under the Employee Retirement Income Security Act. Earlier this month the Tenth Circuit issued a decision upholding the rule, finding that the DOL gave sufficient notice of the proposed rule change, and it acted reasonably in treating fixed indexed annuities differently than other fixed annuities.

The DOL said after the Fifth Circuit decision that it wouldn’t enforce the rule, at least for now, and it hasn’t given a direct answer on whether it will seek review from the U.S. Supreme Court.

NAFA’s appeal in the D.C. Circuit came after a federal district judge in Washington handed a thorough victory to the DOL, declining to block the rule. The case has been on hold for months after the appeals court granted NAFA’s unopposed request to stay the case until the Fifth Circuit ruled on the appeal pending in that circuit. The department didn’t oppose NAFA’s request, which said that many of the same legal issues before the court had been under consideration by the Fifth Circuit.

Bryan Cave LLP represents NAFA. The U.S. Department of Justice represents the DOL.

The case is Nat’l Assoc. for Fixed Annuities v. Acosta, D.C. Cir., No. 16-5345, joint stipulation of dismissal 3/26/18.

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