DOL Proposes Fiduciary Rule Delay

Employee Benefits & Investment Management Update

Date: March 01, 2017

On March 2, 2017, the Department of Labor (DOL) is slated to publish a highly anticipated proposed rule that, once final, will delay by 60 days the applicability date of the DOL’s final fiduciary rule and related prohibited transaction exemptions (collectively, the Final Rule). The proposed rule’s stated purpose is to allow the DOL to examine whether the Final Rule will adversely affect Americans’ access to retirement information and financial advice.

The Final Rule, currently scheduled to apply on April 10, 2017, significantly expands the types of communications and interactions that constitute investment advice under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code and likely will also expand which individuals and service providers are considered fiduciaries subject to the highest standards of care and prohibitions against self-dealing. The Final Rule also includes new and revised prohibited transaction exemptions that require satisfaction of numerous protective requirements for those fiduciaries who will continue to receive conflicted compensation for their services.

Presidential Memorandum

Many service providers and retirement plan industry groups have expressed concerns regarding the Final Rule, including that the compliance burden may stifle qualified plan participants’ and Individual Retirement Account investors’ access to retirement and financial services. President Donald Trump echoed these concerns in a Presidential Memorandum published February 7, 2017, and directed the DOL to examine the Final Rule to determine if it would adversely affect Americans’ access to relevant information and advice. If the DOL makes an affirmative determination, it is directed to publish for notice and comment a proposed rule rescinding or revising the Final Rule.

Proposed Rule

The published rule proposes delaying the Final Rule’s applicability date for 60 days to June 9, 2017, and provides a 15-day notice and comment period regarding the proposed delay. The stated purpose of the proposed delay is to provide the DOL with additional time to prepare an updated economic and legal analysis of the Final Rule as directed by the president. To that end, the published rule also provides a 45-day period during which the DOL will accept from interested parties additional comments and feedback on the market responses to the Final Rule and related costs and benefits. It also includes a non-exhaustive list of relevant questions.


We will continue to monitor and provide updates on further developments regarding the Fiduciary Rule. In the meantime, please contact any member of our Employee Benefits & Executive Compensation group or Investment Management group with questions.

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