As most of you know, the DOL suffered a major setback in the challenge brought by ASA where the court vacated a foundational element of DOL’s new interpretation of the five part test. The court said DOL cannot aggregate rollover advice given to an employer plan participant with subsequent IRA advice for purposes of satisfying the regular basis element of the five part test used to determine fiduciary status. At first the DOL filed an appeal but then withdrew its appeal and now is asking the Magistrate Judge in FACC’s case for more time to address whether the entirety of its new interpretation is rendered unworkable by the ASA decision.

The ASA Order nullifies one of the challenged FAQs on the ground that the policy referenced therein was not a reasonable interpretation of the text of ERISA or the five-part test. Specifically, the court rejected a key element of the DOL’s New Interpretation, which provides that the regular basis requirement for determining fiduciary status will be satisfied in the case of an Investment Professional’s advice to an ERISA plan member with respect to a rollover transaction based on the provision or anticipated provision of post-rollover advice to the IRA owner.

The Court DECLARES UNLAWFUL and VACATES the policy referenced in FAQ 7, remanding it to the Department of Labor for further proceedings consistent with this Order.

This is a statutory construction case. And as such, we believe there’s a basic principle that can and should guide the Court’s decision in matters of statutory construction as it does in matters — many matters under the law. And that — that principle is: Words have meaning. In this particular case, we have the luxury, not often afforded to litigants, that the Fifth Circuit has given us very clear direction as to the meaning of the statute in question arising out of the last time the Department of Labor sought to redefine who’s a “fiduciary” under ERISA.