A Rule Deferred: Department of Labor Delays Implementation of Fiduciary Rule
As we previously discussed in our May 19, 2016 SW Benefits Update, the Department of Labor (the “Department”) previously issued final regulations on fiduciary conflicts of interest in retirement programs. The rules, which focus on curbing self-interested advice to retirement plan and IRA participants, were slated to become effective April 10, 2017.
However, the Department has proposed a delay to the rules of at least 180 days beyond the original effective date and will seek public comment on the rules. The proposed deferral arises from an executive memorandum dated February 3, 2017, in which President Trump instructs the Department to conduct an “updated economic and legal analysis concerning the likely impact of the fiduciary rule.” That memorandum signals that the fiduciary rule “may not be consistent with the policies of [the Trump] Administration.” Accordingly, the fate of the rules in their present form remain uncertain.
Since the rules were finalized in April 2016, a number of lawsuits have been filed challenging them, but so far three federal courts have upheld the rule. For additional information about the legal challenges to the fiduciary rule, please see our June 13, 2016 blog, “Five Lawsuits Filed Against DOL’s Fiduciary Rule (So Far).”