Thrivent Challenges DOL Fiduciary Rule Best Interest Contract Exemption (BICE)
Since it was introduced, parties in the path of the DOL fiduciary rule have challenged the agency’s rule in the courts. The latest litigant to take judiciary issue with the “best interest contract exemption” (BICE) aspect of the rule (to date, there have been six lawsuits filed and oral arguments in two other cases) is Thrivent Financial for Lutherans, a Christian fraternal benefit society that provides insurance and financial services to its members, filed lawsuit challenging the fiduciary rule on September 29, 2016 in the U.S. District Court for the District of Minnesota (captioned Thrivent Financial for Lutherans v. Perez et al., Case No. 0:16-cv-03289).
Law suits challenging the DOL rule do not seem to be getting traction in the courts and according to industry sources we spoke to at a recent Plan Sponsor University (TPSU) event at the University of Pennsylvania, there is not much hope or expectation that legal challenges will prevail. The new rules are set to go into effect in April 2017.
According to a report in the Erisa Practice Center blog :
The Thrivent suit challenges the rule’s “best interest contract exemption” (“BICE”), which requires the resolution of disputes in federal court rather than allowing for alternative dispute resolution methods. Thrivent is objecting to the provisions of the requirement because it argues that its arbitration system is essential to the fraternal nature of the relationship between Thrivent and its members. Thrivent claims that the DOL has overstepped statutory authority under the Administrative Procedures Act because nothing in ERISA indicates Congress intended to require an exclusive judicial remedy, and Congress has supported arbitration agreements as a preferred means of resolving disputes through the Federal Arbitration Act.
