Update On The DOL’s
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:
Best Interest Contract Exemption
Class Exemption for Principal Transactions
in Certain Assets Between Advice
Fiduciaries and IRAS and employeeenefit
Plans (PTE 2016-02); and
Prohibited Transaction Exemption
84-24 for Certain Transactions Involving
Insurance Agents and Brokers, Pension
Consultants, Insurance Companies, and
Investment Company Principal Underwriters
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.