Update On The DOL’s
Fiduciary Rules

On August 31, 2017, the EBSA/DOL furnished a proposed rule to extend the transition period and to delay various applicability dates. Comments were to be submitted by September 15, 2017.

Presumably, these proposed changes will be adopted on a final basis within the next 1-3 months. There was virtually no comment period.

Prior to the issuance of the new proposed rule, the DOL had submitted on August 9, a request to the Office of Management and Budget ("OMB") proposing various amendments to the existing regulation. The OMB did review the proposed amendments and approved them. The new applicability date will be July 1, 2019 rather than January 1, 2018.

There is an 18 month delay.

There is also an extension of the transition period which will now end on June 30, 2019. During the transition period, a fiduciary is not required to comply with all of the BIC exemption requirements. The fiduciary must comply with the impartial conduct standards which require the furnishing of advice in the best interest of the individual, which cannot be misleading and the compensation received must be reasonable.
The delay applies to the:
  1. Best Interest Contract Exemption (PTE 2016-01)
  2. Class Exemption for Principal Transactions in Certain Assets Between Advice Fiduciaries and IRAS and employeeenefit Plans (PTE 2016-02); and
  3. Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters (PTE 84-24).

The cited reason for the delay is the DOL's ongoing review of the Fiduciary Rule and the related prohibited transactions. The current DOL is considering issuing new proposed rules which would be different than those adopted by the Obama administration. However, there has been no indication yet by anyone at the DOL that the Fiduciary Advice definition would be changed.