In April, the Department of Labor issued new regulations under ERISA related to individuals who offer investment advice to ERISA plans, their fiduciaries, or participants for a fee.

The DOL now says that a fiduciary is someone who provides recommendations or advice for a fee to a plan, a plan fiduciary, a plan participant, or an IRA owner for a fee regarding: (1) the advisability of acquiring, holding, disposing, or exchanging plan or IRA assets; (2) the investment of assets after those assets are rolled over, transferred, or distributed from a plan or IRA; and (3) the management of those assets. The new regulation became effective on June 7, 2016.

Investment advisers and other groups are not taking this new rule lying down, and the DOL now faces a number of separate lawsuits, which allege that the DOL overstepped its rule making authority when it issued its new regulation. Five of those lawsuits have been consolidated into one action in the United States District Court for the Northern District of Texas, and a hearing in that consolidated action has been set for November 17, 2016. Another lawsuit has been filed in the United States District Court for the District of Kansas.

In yet another suit, National Association for Fixed Annuities v. Perez, 16-cv-01035 (D.D.C.), the parties are briefing a motion for a preliminary injunction filed by the plaintiff association. The plaintiff association has argued, among other things, that implementing the new rule will have irreparable harm on the fixed annuity industry because the new fiduciary definition will cause jobs to hemorrhage. In addition, the plaintiff argues that the DOL has expanded fiduciary liability far beyond Congress’ intent when it passed ERISA–according to the plaintiff, ERISA fiduciary status is meant to cover only those who provide ongoing management of the plan or its assets.

The DOL has responded with a cross motion for summary judgment and a memorandum in opposition, arguing that its regulation comports with ERISA, and that the plaintiff is playing Chicken Little as to the harm to its membership.

Stay tuned. This surely will wind up before one or more Courts of Appeal and perhaps the Supreme Court.