Tax & benefits associate Joshua Lichtenstein (New York) was quoted in a March 30 article in BenefitsPro (subscription required) discussing the private right of action provision in the Labor Department’s fiduciary rule and its impact on industry stakeholders. The article explains that, under the provision, IRA investors can bring class action claims if the Best Interest Contract (BIC) Exemption is breached; such claims are generally brought as contract law claims in state courts, not under the federal ERISA statute.
“It’s probably the aspect of the rule that industry is most focused on,” said Mr. Lichtenstein. “It’s one of the biggest—if not the biggest concern—with the BIC, even more so than complying with the rule’s complex disclosure requirements.”
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