DOL Delays Fiduciary Rule for 60 days

401(k), fiduciary rule, department of labor

When will the fiduciary rule fly?

It seems like we’ve been here before. The Department of Labor announced a 60-day extension of the applicability dates of the fiduciary rule and related exemptions, including the Best Interest Contract Exemption.

The announcement, which came late Tuesday, follows a Feb. 3, 2017 presidential memorandum which directed the department to examine the fiduciary rule to ensure that it does not adversely affect the ability of Americans to gain access to retirement information and financial advice.

Under the terms of the extension, the DOL is requiring retirement advisors to act as fiduciaries and to give advice that adheres to “impartial conduct standards” beginning on June 9 rather than on April 10, 2017, as originally scheduled.

These fiduciary standard requires advisors to adhere to a best interest standard when making investment recommendations, charge no more than reasonable compensation for their services and refrain from making misleading statements.

The department has requested comments on the issues raised by the presidential memorandum, and related questions. It urges commenters to submit data, information and analyses responsive to the requests, so that it can complete its work pursuant to the memorandum as carefully, thoughtfully and expeditiously as possible.

In the period between now and Jan. 1, 2018, when all of the exemptions’ conditions are scheduled to become fully applicable, the department intends to complete its review under the presidential memorandum and decide whether to make or propose further changes to the fiduciary rule or associated exemptions.

In the absence of further action by the department, the delay announced today does not affect the requirement to enter into a Best Interest Contract and other requirements that are currently scheduled for Jan. 1, 2018.

The fiduciary definition in the Fiduciary Rule published on April 8, 2016, and impartial conduct standards in these exemptions, are applicable on June 9, while compliance with the remaining conditions in these exemptions, such as requirements to make specific written disclosures and representations of fiduciary compliance in communications with investors, is not required until Jan. 1, 2018.

Relevant applicability dates are changed as follows:

The extensions will be published in the April 7, 2017, edition of the Federal Register and can also be viewed on the Employee Benefits Security Administration’s website, along with associated documents, at www.dol.gov/ebsa/.

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