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The Wagner Law Group

The Wagner Law Group is a nationally recognized practice in the areas of ERISA and employee benefits, estate planning, employment, labor and human resources and investment management.


Established in 1996, The Wagner Law Group is dedicated to the highest standards of integrity, excellence and thought leadership and is considered to be amongst the nation's premier ERISA and employee benefits law firms. The firm has eight offices across the country, providing unparalleled legal advice to its clients, including large, small and nonprofit corporations as well as individuals and government entities worldwide. The Wagner Law Group's 34 attorneys, senior benefits consultant and seven paralegals combine many years of experience in their fields of practice with a variety of backgrounds. Nine of the attorneys are AV-rated by Martindale-Hubbell and six are Fellows of the American College of Employee Benefits Counsel, an invitation-only organization of nationally recognized employee benefits lawyers.  Five of the firm's attorneys have been named to the prestigious Super Lawyers list for 2017, which highlights outstanding lawyers based on a rigorous selection process. The Wagner Law Group is certified as a woman-owned and operated business by the Women's Business Enterprise National Council.










Contact Info

The Wagner Law Group


  Integrity | Excellence



Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Washington, D.C.

Tel: (202) 969-2800


Fax: (202) 969-2568

 800 Connecticut Avenue, N.W.

Suite 810

Washington, D.C. 20006



Tel: (847) 990-9034

Fax: (847) 557-1312

190 South LaSalle Street

Suite 2100

Chicago, IL 60603



Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418



Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 


San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104


St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
25 W. Moody Avenue
St. Louis, MO  63119


Lincoln, MA

Tel: (617) 532-8080

Fax: (617) 532-8090

 55 Old Bedford Road

Suite 303

Lincoln, MA  01773








June 15, 2018


Non-ERISA 403(b) Plans may be Subject to Proposed SEC Regulation Best Interest




Although the DOL Fiduciary Rule and related prohibited transaction exemptions are not officially dead until the Court of Appeals for the Fifth Circuit issues its mandate vacating the rule in toto, an event anxiously awaited by the financial industry, recent attention has been focused on the proposed guidance by the SEC (for our newsletter summary
click here) particularly the proposed Regulation Best Interest. Although it will likely be some time before this guidance is issued in final form, and there will likely be some significant changes between the proposed rule and the final rule, it is nonetheless useful to understand the scope of the guidance in its current form.

The Regulation Best Interest is applicable to certain transactions between broker-dealers and a retail customer, defined as "a person, or the legal representative of such person, who: (1) receives a recommendation of any securities transaction or investment strategy involving securities from a broker-dealer or a natural person who is associated with a broker-dealer; and (2) uses the recommendation primarily for personal, family, or household purposes." Thus, while the definition applies to persons, not simply natural persons, an ERISA plan could qualify as a person, but it could not satisfy the second prong of the definition, and therefore would not be a retail customer.

However, the proposed regulation could apply to a non-ERISA plan, such as a non-ERISA 403(b) plan. While the convergence of 403(b) plans and 401(k) plans may have reduced the number of arrangements in this category, the exclusion under the DOL regulations still exists. Under those regulations, a tax-sheltered annuity program that is funded solely through salary reduction contributions or an agreement to forego a salary increase, is not considered to be established or maintained by an employer and, therefore, is not considered a pension plan under Title I of ERISA if: (i) employee contributions are completely voluntary; (ii) all rights under the contract or annuity are enforceable by the employee; (iii) the employer's involvement is limited; and (iv) the employer receives no compensation, direct or indirect, in cash or otherwise, other than reasonable reimbursement to cover expenses involved in performing the employer's obligations under the salary reduction agreement. If these conditions are satisfied, then the employee owning the annuity contract would likely be treated as a "retail customer" and subject to the protections of the Best Interest rules. To that end, although they are treated differently for tax purposes, the participant in the non-ERISA 403(b) plan would seem to be in the analogous position to the owner of an IRA.

As a final thought, fixed annuities and fixed indexed annuities are insurance products, not securities, so the SEC cannot regulate them. Variable annuities are securities and are regulated by the SEC. Since some 403(b) arrangements are funded with fixed and fixed annuity insurance products, state insurance departments might consider adopting the SEC Best Interest standard.




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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.