The Department of Labor has officially proposed a regulation to extend the applicability date of the fiduciary regulation by 60 days.
This means the April 10, 2017 deadline is still in place. If this proposed rule, as written, becomes final before April 10, 2017, the effective date for the fiduciary rule will be delayed until June 9, 2017.
As a reminder, the President’s Executive Memorandum directed the DOL to reconsider the impact of the fiduciary rule. The DOL is stating that they believe they won’t have that work done by April 10, thus the 60-day proposed extension.
The DOL also stated that they want to guard against the risk that industry stakeholders would face two major changes in the fiduciary regulation. They noted that the extension allows them to complete their examination, implement any necessary additional extension(s) and propose and implement a revocation or revision of the rule — without the rule becoming applicable beforehand.
Additionally, the 60-day extension makes it possible to extend the effective date even further. After the DOL completes their examination of any proposed changes and/or revocation of the fiduciary rule, they can delay more if they deem necessary.
The DOL is asking for data on compliance activities already undertaken and the potential change in start-up costs that would result from a delay in the applicability date. They are also asking for comments as to whether the:
“benefits of the proposed 60-day delay, including the potential reduction in transition costs should the Department ultimately revise or rescind the final rule, justify its costs, including the potential losses to affected retirement investors.”
The DOL has met with some strong advocates of the rule over the past weeks, such as AARP, apparently to determine if the proposed delay might constitute a violation of the federal Administrative Procedures Act and trigger lawsuits challenging such a delay.
For more information from ASPPA, click here.