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Joanne Roskey Quoted on Final Rules Interpreting ERISA Expected in 2024 in Law360

"5 Policy Moves Benefits Attys Should Watch For In 2024"


Joanne Roskey, a former Division Chief in the Department of Labor's (DOL) Employee Benefits Security Administration (EBSA), Office of Enforcement, discussed anticipated final rules interpreting the Employee Retirement Income Security Act (ERISA) expected in 2024. Roskey said she is keeping a particularly close eye on DOL's proposal to expand who's considered an investment advice fiduciary under ERISA and proposed regulations further implementing mental health parity-in-coverage requirements for employer health plans. Roskey said of all the pending DOL rulemaking, those two regulations "are going to have the biggest impact." She acknowledged she's also watching to see if the regulations' effective dates get delayed by Administrative Procedure Act (APA) lawsuits she expects to see when the rules are finalized. "Both are very complex regulations and a lot of time and energy will be spent studying and implementing the final rules," Roskey noted. It is anticipated that EBSA will finalize a pivotal set of proposed regulations from October 2023 that would sweep more rollovers out of an employee benefit plan and into an IRA under ERISA's reach. Roskey said the DOL's proposal represents a "significant change from the prior approach" that the Fifth Circuit invalidated, pointing out changes proposed to the 1975 five-part test used to determine when investment advice is subject to ERISA's fiduciary standard. She explained how under the 1975 five-part test's "regular basis" prong, advice was considered subject to ERISA only if it was given to a retirement investor on a regular basis, so one-time rollover transactions wouldn't be considered subject to ERISA's fiduciary standard. Language in the proposed rule changes what "regular basis" refers to, by switching it from the number of interactions with a person receiving the advice to now instead referring to the type of business the adviser is engaging in with regard to a specific client. Roskey said with those changes, the DOL is "trying to address the Fifth Circuit's comments about what it means to have a fiduciary relationship. And the Fifth Circuit focused on the necessity of some kind of relationship of trust, an ongoing relationship of trust."