DOL to Widen "Fiduciary" Net: Proposes the Most Significant Expansion of Its Regulatory Framework Since the Enactment of ERISA

On October 21, the Department of Labor issued a proposed regulation amending the definition of “fiduciary” that, if adopted, would significantly broaden the circumstances under which a person providing services to an employee benefit plan, plan fiduciary or plan participants would be considered a “fiduciary” under Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended. The comment period for the proposed regulation closes on January 20, 2011. The memorandum highlights the key differences between the current regulation and the proposed regulation and considers the practical applications and consequences of the proposed changes.