Federal Judge Blocks Part of Biden-Era PTE 2020-02

While the current DOL is not enforcing the Biden-era DOL investment advice fiduciary standard, challenges to the law continue to exist in the courts. Ruling in favor of a group of insurance and financial professionals, a Texas judge struck down a portion of PTE 2020-02. The guidance at issue would have expanded the definition of investment advice fiduciary in the context of providing advice about rolling IRA funds into other retirement accounts. More specifically, the judge agreed with a magistrate judge's recommendation and struck down the DOL's guidance that would have classified a single rollover as the beginning of an ongoing fiduciary relationship that would satisfy the "regular basis" element of the current five-part standard for determining investment advice fiduciary status. The judge found that the DOL had exceeded their authority and struck down those portions of PTE 2020-02 as "arbitrary and capricious". The case is Federation of Americans for Consumer Choice Inc. et al. v. United States Department of Labor et al. For more information on PTE 2020-02 and the current standard for determining investment advice fiduciary status, visit Tax Facts Online. Read More: Link to Q3986.01. Note: Q is updated.