Department of Labor Proposes 60-day Delay of Fiduciary Rule
On March 1, 2017, the U.S. Department of Labor (the “DOL”) published a proposed rule that would delay the applicability date of its fiduciary rule from April 10, 2017 to June 9, 2017 (a 60-day delay). (For details on the fiduciary rule, see our prior Alert; for details on the DOL FAQs, see our prior Alert on the First FAQ and Alert on the Second FAQ, and for information on the Presidential Memorandum directing the DOL to reexamine the Rule, see our prior Alert on the Presidential Memorandum.) The proposed rule calls for a 15-day comment period on the proposed 60-day delay, including on the appropriate length of the delay and on whether the entire rule should be delayed or whether the delay should apply only to certain aspects of the rule, such as notice and disclosure provisions. During this 15-day comment period, uncertainty will remain regarding whether compliance will be required on April 10, 2017, and any delay will not be official until less than one month before the current compliance date. Individual institutions and advisers will need to decide whether to move forward with their compliance plans in light of this uncertainty or to stop working on compliance in anticipation of a potential delay. Adding to this uncertainty, it is also possible that the DOL may seek to delay the compliance date further in the future.
The proposed rule also calls for comments on the questions raised in the Presidential Memorandum on how the rule may impact the choices available to retirement savers, and generally on questions of law and policy concerning the rule, including questions about the current status of compliance efforts and how revising or revoking the rule would change the current compliance plans and efforts by financial institutions. The comment period for these additional topics is 45 days long.
If you are considering submitting comments in response to either of the DOL’s requests, any member of Ropes & Gray’s ERISA practice group would be happy to discuss potential comments with you.