Why equality matters in the workforce

As the world prepares for the next great technological leap forward since the industrial revolution — through AI, machine learning and the internet of things — employers need to ask who’s going to be left behind in that transformation. According to Tony Prophet, Salesforce’s Chief Equality Officer who recently spoke at the Great Place to Work for All conference in San Francisco, employers must think if these innovations will it make the world more equal or less equal.

One of the four core values at Salesforce is equality, said Prophet. Not only is it important externally, but recognizing it as part of your company’s foundation impacts your decisions, and it starts at the top.

“The people most at risk, you can see it happening over the last decade, are often young women, girls, people of color,” he said. “We naturally want to create opportunities for everyone.”

Prophet noted that the company views itself as having a higher purpose to drive toward an age of company equality. Alos, the CEO and senior executives must set the tone where equality can be effective, and it’s a philosophy that has been a governing value from the beginning.

And as the company moves forward, Salesforce rests on four pillars of equality:

· Equal opportunity — inclusion for all.
· Equal rights — equality for every human being.
· Equal pay — equal pay for equal work.
· Equal education — equal access to quality education.

“None of us are going to be equal until all of us are equal,” Prophet said. And in creating this culture, the company created employee-led and employee-organized groups centered around common life experiences or backgrounds, and their allies.

Equality is an increasing value as discrepancies materialize through globalization, added Michael Rogers, CEO of iFocus: Human Capital Solutions, a consulting firm.

He points to vocational scholars, such as Boston College Lynch School of Education’s David Blustein, who note that access to education, fair consideration for work and the ability to make career decisions are not the same for all.

“Organizations that recognize and address these disparities, through strong organizational culture, position themselves for success now and in the future,” Rogers said.

Back at Salesforce, Prophet noted the employers as implemented a number of groups, called Ohana Groups – built around the Hawaiian concept of Ohana, which means family. These groups include Outforce for the LGBTQ community, Vetforce for the veteran community and BOLDforce to support the black community.

“Be an ally,” he urged. “You can be someone’s ally because you’re there to support your family. One of the things we’ve done is be more systematic in being an ally, it doesn’t mean you agree on every issue.”

Prophet also believes the one of the biggest reasons Salesforce has remained on the list of great places to work is because of the culture it’s created.

Nobody wants to work where they feel like they have to leave some fraction of their identity at the door for fear of retaliation, he said. “But instead [they want to be] working at a company where everyone is seen, everyone feels valued and everyone is heard.”


Awaiting fate of fiduciary rule, plan sponsors turn attention to fee reasonableness

Uncertainty around the fiduciary rule has muddied the waters for retirement plan sponsors and service providers who are still trying to wrap their heads around the role they are expected to play under the regulation. But while plan sponsors await the rule’s fate — which was vacated in a March ruling by the U.S. Court of Appeals for the Fifth Circuit — experts say fee reasonableness should remain a priority.

The fiduciary rule brought fee reasonableness — meaning that while benchmarking your retirement plan against others, your plan's fees should not be too high above the average — top of mind for many employers, says Shelby George, senior vice president, advisor services, at investment firm Manning & Napier. “It is often associated with confusion, both because the DOL never specifically defines what fee reasonableness is, and because it is an area where there has been an enormous amount of ERISA class action lawsuits,” she says. “If you are already accepting fiduciary responsibility, be cognizant that fee reasonableness is a key part of what you are evaluating in your fiduciary capacity.”

[Image Credit: Bloomberg]
[Image Credit: Bloomberg]

Those who don’t accept fiduciary responsibility will still have to keep reasonable compensation in mind because it is a foundational principal that applies throughout the world of financial advice, including the Internal Revenue Service, the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

“Much of our understanding of what is and is not reasonable was shaped by ERISA class action lawsuits and allegations that have been made,” George says. “Those lawsuits were focused not on the fiduciary rule, but fiduciary responsibility to act in the best interest of plan participants. You need to make sure as fiduciaries you are only passing costs on to plan participants that are reasonable in light of the services they are receiving.”

Most tests of whether fees are reasonable don’t look at the value provided in return for the fees being charged, she says. Many assessments will look at market data and will conduct fee benchmarking both for advisory fees and investment management fees. If the fees being charged in a plan are much higher than what others are charging, the fees may not be considered reasonable.

A more subjective test will look at the value of the services being provided for the fee.

“The assessment needs to look at whether the value of the service is commensurate with the fee that is charged. That is very subjective and could be different depending on who is doing the evaluating. There is so much confusion over fee reasonableness,” George says.

Staying the course

In March, the U.S. Court of Appeals for the Fifth Circuit vacated the fiduciary rule. If that decision stands, the fiduciary rule will go away in May and the industry will go back to following the five-part fiduciary test that was used previously. Until the rule is either sent back to the full Fifth Circuit for a rehearing or is reviewed by the Supreme Court, however, the fiduciary rule’s best practices for when someone is considered a fiduciary will remain in effect.

Norma Sharara, a partner in Mercer’s employment practices risk management group in Washington, urges plan sponsors to keep following the rules as they have been. After the Fifth Circuit’s decision, she says, it is uncertain what the Department of Labor will do next.

“The DOL has a couple of choices. One is to do nothing,” Sharara says. “There’s no secret the Trump administration is not a fan of this rule. Some people are wondering why they would challenge what is a good outcome for them politically.”

The DOL could defend the agency’s right to make its own rule, she adds, by asking the Fifth Circuit to rehear the case with a full complement of judges. The Fifth Circuit opinion handed down on March 15 was made by only three Fifth Circuit justices out of 17. If the DOL opts for this course of action, she says, that request has to be filed by April 30. If the DOL doesn’t ask for a full circuit review or ask for an extension, the rule will be officially dead in May.

If the Fifth Circuit denies a rehearing, the DOL must file a petition with the Supreme Court to review the decision within 90 days of the denial.

“We don’t know that until we see what the Labor Department is going to do. The third option is to withdraw the rule. It seems to be what the Trump administration thought it could do when it took office last year,” Sharara says.

In the meantime, “plan sponsors and investment advisers need to stay the course to see what the Labor Department does next. It is a game changer for investment advisers,” she adds.

If the rule is officially killed, the fiduciary rule will go back to where it was since 1975. If that is the case, it is up to plan sponsors to reconnect with all of their plan service providers to make sure they know who is acting as a fiduciary to their retirement plan, she says.

Source: Gladych P. (2 April 2018). "Awaiting fate of fiduciary rule, plan sponsors turn attention to fee reasonableness" [Web Blog Post]. Retrieved from Employee Benefit News.


Summarized Report of The Kaiser Health Tracking Poll March 2018 for Non-Group Enrollees

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Kaiser Health Tracking Poll – March 2018: Non-Group Enrollees

Key Findings: As part of the Republican tax reform plan signed into law at the end of 2017, lawmakers eliminated the ACA’s individual mandate penalty starting in 2019. About one-fifth of non-group enrollees (19 percent) are aware the mandate penalty has been repealed but is still in effect for this year. Regardless of the lack of awareness, nine in ten non-group enrollees say they intend to continue to buy their own insurance even with the repeal of the individual mandate. About one-third (34 percent) say the mandate was a “major reason” why they chose to buy insurance.

Survey: 9 in 10 people with non-group health insurance plan to continue buying insurance despite the repeal of the individual mandate penalty About half the public overall believes the ACA marketplaces are “collapsing,” including six in ten of those with coverage purchased through these marketplaces. In fact, across party identification and insurance type, more say the marketplaces are “collapsing” than say the marketplaces are not collapsing. Overall, the population who buy their insurance through the ACA marketplace report being satisfied with the insurance options available to them during the most recent open enrollment period and more than half give the value of their insurance a positive rating. Yet, some (32 percent) experienced problems while trying to renew or buy their coverage and six in ten marketplace enrollees say they are worried about the possible lack of health insurance coverage in their areas.

In 2017, President Trump issued an executive order directing his administration to expand the availability of non-renewable short-term insurance plans, and regulations have been proposed to implement the order. When asked whether non-group enrollees would prefer to purchase such a plan or prefer to keep the plan they have now, the vast majority (84 percent) say they would keep the plan they have now while 12 percent say they would want to purchase a short-term plan. The most common response offered by people who are uninsured when asked the reason why they don’t have health insurance is that it is too expensive and they can’t afford it (36 percent), followed by job-related issues such as unemployment or their employer doesn’t offer health insurance (20 percent).

Who Are Non-Group Enrollees?
This report examines people’s experiences with the current health insurance market focusing on individuals who currently have health insurance they purchased themselves (referred to as “non-group enrollees” throughout the report). This is comprised of individuals who purchase their own insurance through an Affordable Care Act (ACA) marketplace (“marketplace enrollees”) as well as those who purchase their insurance outside of the ACA markets. 1 In the first half of 2017, 10.1 million people had health insurance that they purchased through the ACA exchanges or marketplaces. 2 For comparison, the report also examines individuals ages 18-64 without health insurance (“uninsured”) as well as those who get their insurance through their employer (“employer-sponsored insurance”).

These extended interviews were conducted as part of the February and March Kaiser Health Tracking Polls and were completed after the close of the law’s fifth open enrollment period, which ended earlier this year. The Individual Mandate as part of the Republican tax reform plan signed into law at the end of 2017, lawmakers eliminated the ACA’s individual mandate penalty. The tax plan reduced the individual penalty for not having health insurance to zero beginning in 2019, effectively repealing the least favorable provision of the ACA (according to polling conducted by Kaiser Family Foundation). There is still uncertainty among the public as well as among the groups most directly affected by the individual mandate (non-group enrollees and the uninsured) on the status of the mandate.

—kff.org


Fresh Brew With Frank Lopez

Welcome to our brand new segment, Fresh Brew, where we will be exploring the delicious coffees, teas, and snacks of some of our employees! You can look forward to our Fresh Brew blog post on the first Friday of every month.

“Our goal is to understand the current situation and what the client wants to accomplish.”

Frank remains consistently driven to build strong business and personal relationships based on trust and loyalty. He has become a trusted advisor to his clients, utilizing his knowledge of the health care field, his experience, and his ability to connect people and build relationships.

Favorite Brew

Light Beer

“Bud Light, Miller Lite, Coors Light…it’s really the people you are enjoying it with that matters! Logo’s Sports Bar & Grill is my recommendation.”

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Silver Spring House

“Peanuts, popcorn or wings. Silver Spring House has a great setup!”

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Direct Primary Care Begins to Change the Mindset Behind Healthcare

 

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A new kind of doctor's office that doesn't take insurance and charges a monthly fee is 'popping up everywhere' — and that could change how we think about healthcare

Bryan Hill spent his career working as a pediatrician, teaching at a university, and working at a hospital. But in March 2016 he decided he no longer wanted a boss. Soon after, Hill learned about a different way to run a doctor's office. "It's the most fun I've ever had," Hill said. Now almost 18 months into his practice, he said, "I couldn't imagine practicing any way else." Hill's practice is something known as direct primary care. Instead of accepting insurance for routine visits and drugs, these practices charge a monthly membership fee that covers most of what the average patient needs, including visits and drugs at much lower prices. Hill is part of a small but fast-growing movement of pediatricians, family-medicine physicians, and internists opting for this different model. It's happening at a time when high-deductible health plans are on the rise.

A survey in September 2016 found 51% of workers had a plan that required them to pay up to $1,000 out of pocket for healthcare until insurance picks up most of the rest. That means consumers have a clearer picture of how much they're spending on healthcare just as they're having to pay more. At the same time, primary-care doctors in the traditional system are feeling the pressure under the typical fee-for-service model in which doctors are pressured to see more patients. The direct primary-care movement — in which practices are set up on a doctor-by-doctor basis — has been slowly but steadily growing over the past few years, adding about 170 practices in the past year despite some larger practices shutting down.

Direct primary care has the potential to simplify basic doctor visits, giving doctors time to focus just on the patient and care for them in ways they might not have had time for otherwise. But there are also concerns from insurers about what separating insurance from primary care will mean for people who still ultimately need insurance. Members of direct primary-care practices pay a monthly fee, which, depending on the practice, your age, and the number of family members you have on the plan, can run from $50 to $150. Included in that monthly fee are basic checkups, same-day or next-day appointments, and — a boon to patients — the ability to obtain medications and lab tests at or near wholesale prices.

Direct primary care also comes with near-constant access to a doctor — talking via FaceTime while the family is on vacation, or taking an emergency trip to the office to get stitches after a bad fall on a Saturday night. Because direct primary care doesn't take insurance, there are no copays and no costs beyond the monthly fee. Doctors can also take the time to keep in touch with patients in between visits to see how they're doing. Paul Thomas, whose practice in Detroit has grown from 50 members to 250 in the past year, will text his patients once a week working on long-term goals like losing weight, eating better, or quitting smoking. He'll check in with the patient, initiating a conversation and keeping the goal in their mind in a way that an infrequent visit to the doctor's office might not. The number of people in a particular practice who have insurance varies, according to the 17 direct primary-care practices Business Insider spoke to. At some practices, all but a handful had some form of insurance, while at others a little more than half didn't have insurance. To describe how coverage functions under direct primary care, doctors use the example of car insurance.

You don't use your car insurance for small transactions like oil changes, but it's there for you if you get in a car accident. Likewise, health-insurance plans — especially those with high deductibles — can be there if you require healthcare beyond just a standard checkup. While the number of direct primary-care practices is growing, it's not exploding in the same way a national chain might be able to. For the most part, doctors build their own practice, which keeps it local.

—businessinsider.com


Organization for Your Business: Top Tips for Corporate HR

 

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How to Address Operational Challenges of Your Organization With Enterprise Mobility

Large-scale enterprises have a few things in common. A large enterprise has its business footprint across geographies. It employs a workforce representing diverse cultures, languages, and age groups and complies with numerous local laws. The complexities multiply when an enterprise has to manage multiple business units, branches, and teams. Taking speedy decisions gets difficult for CIOs due to the sheer size and complexity of the enterprise. A slight miscalculation or business IT alignment (BITA) misstep results in adverse, enterprise-wide impact, financial losses, and reputation damage. Today's enterprises have to tackle some new difficulties too. Your organisation, perhaps, is no exception.

Difficulties range from changing regulatory environment, disruptive competition from start-ups, and rising expectations of the digitally empowered consumers. Given these realities, the only way an enterprise can take these challenges head-on is by embracing digitalisation. The advancements in technology have mandated that companies have 'digital' in their business DNA. For instance, mobility, one of the key pillars of digitalisation, can be harnessed to achieve productivity and efficiency goals while delivering a seamless user experience. A few forward-thinking organisations have succeeded in delivering great user experience by making their internal-only processes available to customers.

The self-service portals by financial services and e-commerce players, for instance, provide a wider choice to customers and also reduce the operational strain on these organisations. Let's explore how digitalisation can yield greater operational efficiencies. One time-consuming activity commonly found across departments of a large enterprise is report generation. From accounts to HR to sales to warehousing to manufacturing-nobody loves it but does it, nevertheless. Report generation hampers productivity and clogs network bandwidth-these reports are shared with everyone as email attachments. At another level, it also makes life difficult for the analytics teams who have to make sense of massive unstructured data.

Providing relevant and well-designed app dashboards to every person may nullify these issues in one clean swipe. Sharing reports can merely be app based comments without having to send email attachments. The organisation can accrue huge time savings and free up its valuable resources for productive assignments. The corporate HR is supposed to play an empowering role. However, burdened by operational difficulties, the HR often struggles to turn its programmes effective. Take an example of on-boarding of new recruits and induction training. Given the multi-geographic nature of a large organisation, it is challenging (and expensive) to conduct onboarding and training sessions across time zones and locations. Ensuring that every new recruit attends these sessions is another challenge. Measuring the effectiveness of training-whether the employee has fully grasped the training content or not-is yet another difficulty. With the help of a modern, container app architecture, you can address these issues effectively.

—entrepreneur.com


Health Savings Accounts: What Did The IRS Change?

 

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Don’t Get Tripped Up By The IRS’ Tweak To Health Savings Accounts

It’s tax time, and this week I answered questions from readers about the penalty for not having health insurance as well as changes to health savings accounts. I also discuss health insurance coverage options for a reader’s parents who are immigrants and green card holders.

Q: I heard that health savings account rules would be loosened under the new spending bill passed by Congress last month. Did that happen?

No. In fact, the standards have become slightly tighter this year. In recent years, members of Congress from both parties have supported expanding eligibility for health savings accounts and how the money in them can be spent, among other things. To date, though, those proposals haven’t become law.

Health savings accounts, which are linked to high-deductible health plans, continue to multiply. In 2017, there were 22 million accounts totaling more than $45 billion in assets, an increase of 11 percent in the number of accounts over the previous year, according to Devenir, a firm that offers advice on HSA investments. Money deposited in HSAs is tax-deductible, grows tax-free and can be used without owing tax to pay for medical expenses. Advocates promote the plans as a way to help consumers play a larger role in controlling their health spending and say that the tax advantages help people afford care.

The Internal Revenue Service announced last month that the maximum amount individuals with family coverage could contribute to their health savings accounts would actually be reduced slightly from their previously announced limit for 2018. The maximum contribution for people with individual coverage in 2018 remains $3,450. The $50 family coverage contribution reduction, from $6,900 to $6,850, is pretty small change. It happened because the federal government altered the way it calculates inflation adjustments to the contribution limits.

But ignoring the new limit could create headaches for people who have already made the maximum HSA contribution for the year based on the $6,900 figure, said Roy Ramthun, president of HSA Consulting Services. If you don’t ask the bank that handles your HSA to return the $50 plus any earnings that have accrued before the next tax season, your taxable income will be off by that amount, plus you’ll be on the hook for a 6 percent penalty for exceeding the maximum contribution allowed. That’s not going to amount to a lot of money, but there’s more than financial pain to consider, Ramthun said. “Do you really want to give the IRS a reason to come find you?”

Q: I didn’t have health insurance for one month last year, in January 2017. Do I owe a penalty for not having health insurance when I file my taxes this spring?

If you were uninsured for only one month in 2017, you won’t owe a penalty. People can be uninsured for up to three consecutive months during the year without triggering a tax penalty for not having coverage, said Tara Straw, a senior policy analyst at the Center on Budget and Policy Priorities. This year, for the first time, the Internal Revenue Service won’t accept electronically filed tax returns unless filers report whether they had health insurance all year, were exempt from the requirement or will pay a penalty for not having had coverage. Tax refunds that are due with paper returns that don’t have this information may be delayed, according to the IRS.

—khn.org


The Results Are In: These Are the Companies With the Most Influence Over Washington

 

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Poll: Americans Aghast Over Drug Costs But Aren’t Holding Their Breath For A Fix

The recent school shootings in Florida and Maryland have focused attention on the National Rifle Association’s clout in state and federal lobbying activities. Yet more than the NRA or even Wall Street, it’s the pharmaceutical industry that Americans think has the most muscle when it comes to policymaking. A poll from the Kaiser Family Foundation found that 72 percent of people think the drug industry has too much influence in Washington —outweighing the 69 percent who feel that way about Wall Street or the 52 percent who think the NRA has too much power. Only the large-business community outranked drugmakers. (Kaiser Health News is an editorially independent program of the foundation.)

Drug prices are among the few areas of health policy where Americans seem to find consensus. Eighty percent of people said they think drug prices are too high, and both Democrats (65 percent) and Republicans (74 percent) agreed the industry has too much sway over lawmakers. Democrats were far more likely than Republicans — 73 vs. 21 percent — to say the NRA had too much influence. The monthly poll also looked at views about health care. Americans may be warming to the idea of a national health plan, such as the Medicare-for-all idea advocated by Sen. Bernie Sanders (I-Vt.). Overall, 59 percent said they supported it, and even more, 75 percent, said they would support it if it were one option among an array for Americans to choose.

Americans are far more concerned with lowering prescription drug prices, though they don’t trust the current administration to fix the problem. Fifty-two percent said lowering drug costs should be the top priority for President Donald Trump and Congress, but only 39 percent said they were confident that a solution would be delivered. “There’s more action happening on the state level; what we are finding is they’re not seeing the same action on the federal level,” said Ashley Kirzinger, a senior survey analyst for KFF’s public opinion and survey research team. “They’re holding the president accountable as well as leaders of their own party.”

Overall, at least three-quarters of people don’t think Democrats and Republicans in Congress, as well as the Trump administration, are doing enough to bring costs down. Twenty-one percent reported that they didn’t trust either party to lower prices, up from 12 percent in 2016. And, unlike other health-related policy questions such as repealing the Affordable Care Act or creating a national health plan, the poll does not find a partisan divide on this perception.

Passing legislation to lower drug prices was at the top of the list of the public’s priorities, making it more important than infrastructure, solving the opioid epidemic, immigration reform, repealing the ACA or building a border wall. Looking ahead to the 2018 midterm elections, 7 percent reported that creating a national health plan was the “single most important factor” for how they would vote in 2018. However, 7 in 10 said it is an important consideration, and 22 percent said it is not an important factor at all.

The poll found that support for the federal health law fell this month, from February’s all-time high of 54 percent to 50 percent in March. Opposition moved up slightly from 42 to 43 percent. The poll was conducted March 8-13 among 1,212 adults. The margin of sampling error is +/-3 percentage points. KHN’s coverage of prescription drug development, costs and pricing is supported by the Laura and John Arnold Foundation .

—khn.org


You May Want To Rethink Your 'Cultural Fit' Mentality, and Here's Why

 

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Why achieving diversity in tech requires firing the industry’s ‘cultural fit’ mentality

If you have interviewed for a technology job, there’s a good chance the words “culture” and “fit” made an appearance during the phone-screen phase, or in early rounds of interviews. It is no longer enough for a candidate — especially early to mid-career — to arrive to job interviews with a stellar resume and relevant technical skills. They might also have to come with their best “I’m normal and will fit into the overall team culture of this company” outfit on. Over the past decade, the idea of hiring for “cultural fit” has become as important as, and at times superseded, hiring to fit a job description across forward-looking industries, from tech to transportation.

The nuance of this shift may be a cause for concern — especially for a global tech sector in search of a clear route to workforce diversity. Many of today’s tech human resources teams are tasked with recruiting a diverse group of people and retaining star employees. However, they still tend to supplement those pursuits with cultivating a unified office culture. While the industry has largely moved on from using ping pong tables as a recruiting tool, hiring people who pass the Beer Test — an applicant that hiring managers could work with in the office and hang with at happy hour — remains commonplace. Further, hiring based on a hiring manager’s own narrow set of requirements needed to fit their idea of a relatable person opens the door to all sorts of unconscious biases. Taking this recruiting shortcut also raises the bar for candidates from already under-represented groups, including minorities and women.

The main casualties: the pursuit of diversity and business bottom lines. It is true that research-backed conventional wisdom suggests happy workplaces are productive workplaces. What that line of thinking doesn’t account for is the fact that exclusively hiring talent for interpersonal compatibility can negatively impact the quality of work and focus of employees. In other words, employee camaraderie does not equal workplace compatibility. It definitely does not equal workforce diversity. And while a company may benefit from a general aspect of like-mindedness, there’s a great chance that the actual work is suffering due to the lack of diversity — both in people and ideas. Here in Toronto, hiring managers still focus heavily on likeability, which at times can be seen as more important than technical skills. My team and I recently began to see to potential impacts of “cultural fit” as we started to dive into the findings of our new report on the state of talent in Toronto’s emerging tech sector.

—techcrunch.com


5th Circuit Ruling Leaves DOL’s Fiduciary Rule in Limbo

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When the Dallas-based 5th Circuit Court of Appeals struck down the Department of Labor's (DOL's) controversial fiduciary rule on March 15, just two days after the Denver-based 10th Circuit upheld the same rule, it created a split among the circuits. As a result, the U.S. Supreme Court may eventually decide the rule's fate. In the meantime, President Donald Trump's administration continues to review its options.

"Pending further review, the [Labor Department] will not be enforcing the 2016 fiduciary rule," a DOL spokesman said in a statement to CNBC. Prior to the court decisions, Labor Secretary Alexander Acosta said that the DOL was considering public input about revising the regulation and, if necessary, will propose changes in consultation with the Securities and Exchange Commission and other regulators.

However, unless the fiduciary rule is definitively repealed or replaced, employers that sponsor 401(k) and similar defined contribution plans should continue to take it seriously and closely monitor their vendor arrangements, benefits advisors said. The Obama administration's regulation, formally known as Definition of the Term "Fiduciary"; Conflict of Interest Rule-Retirement Investment Advice, began taking effect in stages in June 2017.

The rule requires anyone being paid to give investment advice to retirement savers—whether to participants in a 401(k) or similar employer-sponsored plan or to those with individual retirement accounts (IRAs)—to follow the fiduciary standard of conduct under the Employee Retirement Income Security Act (ERISA). In other words, investment advisors can only make recommendations that reflect loyalty to the "best interests" of plan participants without regard to commissions and fees rather than investments that are just "suitable," and must disclose any potential conflicts of interest. Failure to do so means that advisors—and the plan sponsors that hire them—could face class-action lawsuits brought by participants and ERISA-violation penalties.

In the 5th Circuit ruling, a three-judge panel split 2-1 in vacating the rule where the court has jurisdiction—Texas, Louisiana and Mississippi. The court, in particular, held that the DOL went too far in extending the fiduciary standard to advice provided to IRA savers. "IRA plan 'fiduciaries,' though defined statutorily in the same way as ERISA plan fiduciaries, are not saddled with these duties, and DOL is given no direct statutory authority to regulate them," the majority opinion stated. Days earlier, in a March 13 decision, the 10th Circuit held that the fiduciary rule was the result of a sound regulatory process. "Relying on the record before it, the DOL could reasonably conclude that the benefits to investors outweighed the costs of compliance," the two-judge panel said.

—shrm.org