Q: Has the Department of Labor extended the applicability date of its Fiduciary Conflict of Interest rule?
A: Yes. The Department of Labor's (DOL) Employee Benefits Security Administration published a proposed rule on March 2, 2017 to extend for 60 days the applicability date of the Definition of the Term “Fiduciary;” Conflict of Interest Rule—Retirement Investment Advice (final rule). The final rule was published on April 8, 2016, became effective on June 7, 2016, and has an applicability date of April 10, 2017. The proposed rule would extend that applicability date 60 days to June 9, 2017.
The final rule defines who is a fiduciary of an employee benefit plan under the Employee Retirement Income Security Act of 1974 as a result of giving investment advice to a plan or its participants or beneficiaries. The final rule also applies to the definition of a fiduciary of a plan including an individual retirement account (IRA). The final rule treats persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA as fiduciaries in a wider array of advice relationships than was true of the prior regulatory definition.
On February 3, 2017 President Trump issued a memorandum to the Secretary of Labor directing DOL to examine whether the final rule may adversely affect the ability of Americans to gain access to retirement information and financial advice, and to prepare an updated economic and legal analysis concerning the likely impact of the final rule as part of that examination.
The proposed rule invites comments on the 60-day delay of the applicability date for the final rule, on the questions raised in the Presidential Memorandum, and generally on questions of law and policy concerning the final rule. Comments are due March 17, 2017.