Got an Opinion? Here’s Your Chance to Be Heard!
On Wednesday, March 1, the Department of Labor released a proposed rule that would extend the effective date of the new ERISA Fiduciary Rule by 60 days, delaying implementation of the final rule from the current April 10 compliance date to June 9, 2017.
The DOL proposal includes a 15-day comment period during which interested parties may communicate to the DOL about whether, in their opinion, the fiduciary rule should continue to be effective on April 10, or delayed under the guidelines of the rule that were proposed on March 1.
The DOL will take additional comments for a period of 45 days on a list of questions about the impact of the fiduciary regulation and the exemptions it contains, and specifically invites comments on prohibited exemptions and the Best Interest Contract Exemption. Additionally, it is seeking comment to President Trump’s directive to the DOL to “determine whether it [the fiduciary rule] may adversely affect the ability of Americans to gain access to retirement information and financial advice.”
At the end of the 15-day comment period, which should fall on or about St. Patrick’s Day, the DOL will review all of the comments and then draft a final rule regarding the delay of the applicability date to June 9. After this rule is drafted, it will be sent to the Office of Management and Budget for another review and official publication. This must take place prior to the original application date of April 10.
This implementation delay is the first step in complying with President Trump’s February 3 directive to the Department of Labor to review the fiduciary rule from a “cost/benefit” perspective and assess whether or not it causes harm to investors or the industry that is economically significant. If the DOL determines it harmful, the rule will be revised or replaced accordingly.
As discussed in earlier blog posts, proponents of the fiduciary rule say that it will protect workers and retirees from conflicted advice that results in the purchase of inappropriate higher-fee investments that reduce retirement savings. On the other side of the debate, many financial services firms and industry representatives argue that the rule is too complex and unnecessarily costly and will cause small investors to be directed to investments that may not be in their best interests.
Stay tuned for more fiduciary fun!