In Advisory Opinion 2011-08A (June 21, 2011), the U.S. Department of Labor (DOL) concluded that ERISA “investment advice” fiduciaries are within the scope of Prohibited Transaction Exemption (PTE) 86-128, thus confirming the availability of conditional relief for such a fiduciary (or an affiliate) to effect securities transactions or cross trades for a fee as an agent for an ERISA plan.  

  • This is one of several long-standing, unresolved issues under existing ERISA prohibited transaction relief that takes on greater importance in light of DOL’s proposed expansion of the definition of “fiduciary.”
  • In particular, the reference in PTE 86-128 to a fiduciary “using its authority” to cause the plan to pay it a fee for a securities transaction gave rise to a lingering question of whether fiduciaries that only provide investment advice were excluded from the scope of the exemption.  

DOL considered this issue on a timely basis, in relation to its ongoing regulatory process for redefining “fiduciary.” DOL properly confirmed that PTE 86-128 is available to any fiduciary within the meaning of ERISA § 3(21)(A), including those who only provide investment advice (subject to the special provisions in the exemption for plan sponsors, administrators and certain other fiduciaries).