"DOL’s Proposed Changes to Definition of Fiduciary: Significant Impacts for Financial Companies and Plans"

On October 21, 2010, the Department of Labor ("DOL") proposed changes to the definition of fiduciary under the Employee Retirement Income Security Act of 1974, as amended ("ERISA").  The proposed changes are the first such changes in almost thirty-five years and could change individuals' and entities' relationships with plans and entities subject to Title I of ERISA, or plans or entities subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), such as individual retirement accounts (collectively "Plans"). 

Under the proposed definition, the category of individuals and entities that would be considered fiduciaries under ERISA and analogous provisions of the Code is likely to be broadened substantially.  This Stroock Special Bulletin examines the proposed changes and how they may affect not only plan sponsors, but broker-dealers, consultants, investment managers, custodians, administrators, appraisers, valuation agents and others providing services to, dealing with, or advising Plans.