DOL Delays Applicability of Fiduciary Investment Advice Rule by 60 Days | Practical Law

DOL Delays Applicability of Fiduciary Investment Advice Rule by 60 Days | Practical Law

On March 1, 2017, the Department of Labor (DOL) issued a proposed rule that delays by 60 days the applicability of the final fiduciary investment advice regulation that replaces the existing regulatory interpretation of fiduciary investment advice under Section 3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 (ERISA) (81 Fed. Reg. 20945 (Apr. 8, 2016)) (fiduciary rule).

DOL Delays Applicability of Fiduciary Investment Advice Rule by 60 Days

Practical Law Legal Update w-006-7286 (Approx. 4 pages)

DOL Delays Applicability of Fiduciary Investment Advice Rule by 60 Days

by Practical Law Employee Benefits & Executive Compensation
Published on 02 Mar 2017 • USA (National/Federal)
On March 1, 2017, the Department of Labor (DOL) issued a proposed rule that delays by 60 days the applicability of the final fiduciary investment advice regulation that replaces the existing regulatory interpretation of fiduciary investment advice under Section 3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 (ERISA) (81 Fed. Reg. 20945 (Apr. 8, 2016)) (fiduciary rule).
On March 1, 2017, the Department of Labor (DOL) issued a proposed rule (82 Fed. Reg. 12319 (Mar. 2, 2017)) that delays by 60 days the applicability of the final fiduciary investment advice regulation that replaces the existing regulatory interpretation of fiduciary investment advice under Section 3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 (ERISA) (81 Fed. Reg. 20945 (Apr. 8, 2016)) (fiduciary rule).
The DOL issued the final fiduciary rule on April 6, 2016 and it was scheduled to become applicable on April 10, 2017 (for more information on the fiduciary rule, see Fiduciary Investment Advice Toolkit). In connection with the fiduciary rule, the DOL also issued two new prohibited transaction exemptions (PTEs) as well as revisions to several existing PTEs. The final rule applies to both ERISA-governed employee benefit plans and individual retirement accounts (IRAs).
However, several recent changes have been made to the timing of the fiduciary rule, including:
  • On February 3, 2017, President Trump issued a memorandum indicating that the fiduciary rule may not be "consistent" with the priorities of his administration and directing the DOL to review the fiduciary rule.
  • On February 9, 2017, the DOL filed paperwork with the Office of Management and Budget (OMB) to delay the applicability of the fiduciary rule.
  • On March 1, 2017, the DOL issued an unpublished version of a proposed rule that would extend the applicability date of the fiduciary rule by 60 days while it considers the impact of the memorandum on the fiduciary rule.
In the proposed rule, the DOL invites comments on the proposal to extend the applicability date of the final rule, including comments on the length of the delay period, which was originally anticipated to be 180 days.
Practitioners should continue to track the status of the fiduciary rule and the 60-day delay proposed by the DOL to determine if and when the fiduciary rule will become applicable.