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FACC v. DOL Supplemental Brief

The Proposed Rule proves an important point, i.e., the DOL’s goal has remained unchanged over the past 15 years of rulemaking. While the DOL will likely insist that the Proposed Rule is different from the New Interpretation because the DOL is repealing the five-part test, that is an immaterial distinction. In fact, the Proposed

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DOL Comment Letter from Figari+Davenport

It is hard to state forcefully enough how the Department’s proposals reflect a complete lack of deference to the Chamber of Commerce opinion. The Department seems to believe it is unencumbered by the Fifth Circuit decision, which it tries to reduce to mere criticism of the Best Interest Contract (BIC) Exemption. In

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FACC DOL Rule Press Release-Supplemental Brief Motion

FACC at the same time is strongly objecting to DOL’s new rule proposal as inherently incompatible with ERISA as spelled out by the Fifth Circuit decision. “FACC will have no choice but to ask the courts yet again to intervene if the DOL dares to move forward with this proposal

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FACC Plaintiffs’ Unopposed Motion For Leave to File Supplemental Brief

In this regard, by now proposing to overhaul PTE 84-24, the DOL sabotages the assurances in its briefing that the New Interpretation had preserved that exemption for insurance agents who would be swept into its far broader reading of the five-part test. Similarly, the DOL has argued that the major question doctrine should not apply because the expansion of fiduciary responsibility under ERISA did not have far-reaching economic impact or involve a matter of political significance. The contents of the new proposal, introduced with fanfare by the President himself, demonstrate otherwise.

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FACC DOL Update – New DOL Rule Proposal

…it is offensive that the DOL tries to characterize commissions and other financial components within annuities as “junk fees”. That is a term never before applied to annuities and amounts to a slanderous characterization of the compensation paid to hardworking insurance agents. To our knowledge, all annuity fees charged to clients are routinely and prominently disclosed as required by state insurance law. We hope industry will join FACC in pushing back hard against this cynical propaganda ploy in order to protect the reputation of our products and agents.

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FACC Final Brief in DOL Lawsuit

[T]he DOL continues to ignore or twist what the New Interpretation says and what the Fifth Circuit held in Chamber of Commerce. . . . Having convinced the Magistrate Judge to accept the premise that it hasn’t really reinterpreted the five-part test in any meaningful way, the DOL now hopes the Court will not look too closely under the hood but instead simply adopt the Magistrate Judge’s erroneous Recommendations. The Court cannot do so, however, without running afoul of the Fifth Circuit’s unequivocal holdings on the proper interpretation of ERISA and the five-part test. 

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FACC Objections & Brief in Support of Objections

Importantly, vacatur of the scope recommended by the Magistrate Judge frustrates the DOL’s express purpose in adopting the New Interpretation, which set forth the DOL’s “final interpretation of when advice to roll over [Title I] Plan assets to an IRA will be considered fiduciary investment advice under Title I and the Code” (AR 1), and will significantly limit the effect of the New Interpretation. It does not, however, go far enough. Plaintiffs raised multiple other grounds on which the New Interpretation is fatally inconsistent with ERISA and the five-part test. Allowing the remainder of the New Interpretation to survive would leave in place significant and unjustified burdens on the Plaintiffs and similarly situated parties, who would still be at risk of being considered fiduciaries under ERISA or the Code where they never were before and never would be under the common law meaning of the term fiduciary. The DOL’s attempt to broaden the definition of fiduciary to encompass ordinary salespeople who only provide advice incidental to the sale of products cannot be squared with the holding of Chamber of Commerce. In concluding otherwise, the Magistrate Judge’s Recommendations regularly mischaracterize or minimize Plaintiffs’ arguments, ignore or misinterpret the language of the New Interpretation, and disregard the unequivocal holdings of the Fifth Circuit regarding Congress’ intent in using the term fiduciary in ERISA. This was plainly erroneous.

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FACC v. DOL Joint Motion for Extension

Based on the foregoing, Plaintiffs and Defendants respectfully request an extension of the deadline for filing objections to the Recommendations up to and including August 14, 2023. In addition, Plaintiffs and Defendants request that the Court order that the responses to any objections filed by either party will be filed on or before September 13, 2023, with any reply briefs to be filed by October 4, 2023.

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Magistrate Judge’s Recommendation in FACC v. DOL

The Court should vacate the portions of PTE 2020-02’s text and preamble that allow consideration of Title II investment advice relationships when determining Title I fiduciary status, including the New Interpretation’s (i) allowance of review that a single rollover “can be the beginning of an ongoing advice relationship” to Title II plans…

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Dear Friend Update 6-20-23

Regarding the DOL submission in our case, we think DOL sidesteps the real issue, which is that the ASA decision knocked out the lynchpin of their New Interpretation in the sense it essentially blocks DOL from applying its guidance on who is a fiduciary in typical rollover situations when rollovers were the very reason for the DOL rulemaking in the first place. We also think it is noteworthy that the ASA decision was rendered four months ago and DOL has yet to formally acknowledge that court’s decision and follow through on the remand for “further proceedings consistent with this Order.”

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