No Further Delays for Fiduciary Rule

This week, U.S. Department of Labor (DOL) Secretary Alexander Acosta announced that the agency will not further delay the fiduciary rule ahead of the first June 9 effective date. Additional provisions of the rule are scheduled to take effect Jan. 1, 2018, but the DOL will seek public comment on whether an additional delay of this latter effective date is necessary.

The fiduciary rule is a federal regulation that tightens conflict of interest rules under the Employee Retirement Income Security Act (ERISA) and requires insurance agents and brokers who give guidance about certain retirement investments to adhere to a fiduciary standard of care.

In an op-ed in the Wall Street Journal, Secretary Acosta noted that the Administrative Procedures Act prevents further delays of the June 9 implementation date. However, the DOL is committed to continuing to review and potentially revise the rule. The announcement came as pressure was mounting on the DOL to further delay the rule, including a congressional hearing focused on “flaws” in the rule.

The DOL is currently reviewing the fiduciary rule in response to a memorandum President Trump issued in early February, which directed the DOL to review the rule to “determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”

Pursuant to the President’s memorandum, the DOL sought public comments in April. In response, the Big “I” submitted a comment letter suggesting that the DOL update the economic impact analysis on the rule to take into account the value of personalized retirement advice. The association’s letter also recommended changes such as broader education, referral and marketing exemptions.

The DOL posted a temporary enforcement policy outlining how the department intends to enforce the fiduciary rule during the phased-in implementation period between June 9 and Jan. 1, 2018. The DOL also posted FAQs about the transition period.

The Big “I” will continue to update members on developments as implementation and review of the rule progresses, and express the association’s concerns with the rule to the DOL and Congress.

Jennifer Webb is Big “I” federal government affairs counsel.