On Wednesday, March 1, the Department of Labor (DOL) proposed a 60-day delay of the applicability date (currently April 10) of the Fiduciary Rule, which would also include a delay to the Prohibited Transaction Exemptions, specifically the Best Interest Contract Exemption. The DOL has listed two comment periods: a 15-day comment period on the proposed 60-day delay and a 45-day comment period applicable to the concerns expressed in the Feb.3 Presidential Memorandum directing the DOL to review the rule.
The specific areas of concerns outlined in the President’s memorandum include:
- Whether the applicability of the final rule has harmed or is likely to harm investors due to a reduction of access to certain retirement savings offerings, products structures, savings information or related financial advice
- Whether the April 10 applicability date has resulted in dislocations or disruptions within the retirement services industry that would adversely affect investors or retirees
- Whether the final rule is likely to cause an increase in litigation and an increase in prices that investors and retirees must pay to gain access to retirement services
Should the DOL’s review of the final Rule determine that it’s inconsistent with the priorities of the Administration, the Administration has directed the DOL to publish notice that the Rule will be rescinded or revised, as appropriate and consistent with existing law. Additional information on the delay can be found here.
When asked about this delay in implementation, Kestra’s SVP and COO Mike Pedlow said, “We believe that the 60-day delay will allow the DOL to do the appropriate analysis that will allow it to alter the rule to make it more manageable. We fully support a fiduciary standard and look forward to helping shape what that may look like by working with the FSI, NAPA and other advocacy groups. As noted previously, we won’t be publishing additional policy updates, pending a determination as to the applicability date of the rule.”