DOL Fiduciary Rule – A Proposed Delay and Uncertain Future
We’ve previously written about the Department of Labor’s new fiduciary rule, which expands the definition of who is considered a fiduciary under the Employee Retirement Income Security Act, as amended (“ERISA”) and the Internal Revenue Code of 1986, and which addresses related prohibited transaction exemptions. The rule was finalized in April 2016 and is currently set to become applicable on April 10, 2017. The rule’s implementation, however, has been a specific focus of President Donald J. Trump and his administration. As discussed here, on February 3, 2017, President Trump issued a Presidential Memorandum ordering the DOL to examine the rule, requiring in particular an updated economic and legal analysis of the impact of the rule (though the Memorandum did not specifically call for a delay to the rule’s applicability date, as many had expected).
Today the DOL announced a proposed extension of the applicability date of the new fiduciary rule. The proposal will be published in the March 2, 2017, edition of the Federal Register. According to a DOL News Release, the stated purpose of the extension is to “give the department time to collect and consider information related to the issues raised in the Presidential Memorandum before the rule and exemptions become applicable.” The DOL has stated that, following the 60-day extension and examination, it may allow the rule to become applicable, propose a further extension, or propose to amend or withdraw the rule entirely. The comment period relating to the 60-day extension runs for 15 days following the publication of the proposal, while the comment period relating to the Trump-mandated examination of the rule runs for 45 days from the same date.