We are issuing the latest update to our series of Alerts regarding the final rules issued by the Department of Labor (“DOL”) with respect to fiduciaries under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the DOL’s Best Interest Contract Exemption (“BIC Exemption”) from ERISA’s prohibited transactions provisions.
On December 15, 2016, the United States Court of Appeals for the District of Columbia Circuit denied the emergency motion filed by the National Association for Fixed Annuities (“NAFA”) to enjoin enforcement of the ERISA Fiduciary Rule and BIC Exemption pending appeal. National Association for Fixed Annuities v. United States Department of Labor and Thomas E. Perez, in his official capacity as Secretary of the United States Department of Labor, Case No. 16-5345 (D.C. Cir. Dec. 15, 2016). Before the district court, the Honorable Randolph D. Moss, U.S.D.J. had granted the DOL summary judgment on NAFA’s challenge to the ERISA Fiduciary Rule and BIC Exemption and denied NAFA’s motion for a preliminary injunction and summary judgment. NAFA thereafter filed an appeal with the D.C. Circuit from Judge Moss’s grant of summary judgment, requesting expedited review by that court. On its motion for an emergency injunction, NAFA had argued that that its members “will be forced to accelerate irreversible, costly, and industry-altering actions in the weeks ahead to restructure their entire distribution system, which has been in place for decades.” The appellate panel issued a per curiam decision denying NAFA’s motion, concluding that NAFA “has not satisfied the stringent requirements for an injunction pending appeal.” The D.C. Circuit’s decision can be found at the following link: https://assets.documentcloud.org/documents/3239244/Nafa-Ruling-20161215.pdf