A federal judge has approved a Department of Labor request to pause two cases challenging the DOL’s Biden-era fiduciary investment advice rule so that Trump administration officials can familiarize themselves with the pending litigation.
The Department of Justice, on behalf of the DOL, filed the motion Feb. 11 with the 5th U.S. Circuit Court of Appeals in New Orleans, seeking to temporarily halt the cases “to allow new DOL officials sufficient time to become familiar with the issues in these cases and determine how they wish to proceed.”
The court on Feb. 14 approved the government’s request and paused the cases for 60 days. The motion was unopposed by the parties challenging the rule, which include insurance and annuity groups.
In April, under the Biden administration, the DOL finalized the Retirement Security Rule, which, among other things, changed the five-part test so one-time advice, such as rollovers to IRAs or annuity purchases, must be in an investor’s best interest.
Biden-era officials said the rule was needed to better protect retirement savers and was more narrowly tailored than a 2016 Obama-era rule, which swept up virtually any recommendation to a retirement investor, that was struck down in 2018 by the 5th Circuit.
Insurance and annuity groups filed two separate lawsuits challenging the rule, and in July, two U.S. District Court judges stopped implementation of the rule, which was slated to take effect in September.
The DOL subsequently filed an appeal with the 5th Circuit, but now, the new administration has 60 days to decide if it’s going to change course.
