The National Association for Fixed Annuities’ (NAFA) attempt to challenge the Department of Labor’s (DOL) new fiduciary rule for retirement advice was denied by a federal judge in Washington, D.C., on Friday, November 4.
This ruling was the first court decision over a legal challenge to this rule, in which NAFA asked the court to both delay the date the rule would be implemented as well as vacate and set aside the new rule.
In a memorandum opinion, United States district judge Randolph Moss wrote:
“The court will deny NAFA's motions for a preliminary injunction and for summary judgment and will grant the [Labor] Department's cross-motion for summary judgment.”
NAFA attempted to challenge the new rules by arguing that it would have negative consequences for the fixed indexed annuities industry, that the DOL overstepped its bounds, and that the industry could almost definitely not meet the April 2017 deadline.
Counter to the points that NAFA raised, Secretary of Labor Thomas Perez released a statement on Saturday, November 5 and stated that:
“[The ruling is] a win for working Americans who simply want a secure retirement… The conflicts of interest rule was developed after substantial input from a variety of stakeholders, including the industry, and it will make sure that retirement savers receive advice that puts their interests first. I'm pleased that the court recognized the comprehensive and thoughtful process we used in crafting this rule.”
While the new rule still faces down opposition from five impending lawsuits as well as an appeal of this first decision, Perez and other supporters of the bill maintain an optimistic outlook for its future.