June 30, 2017 (Updated July 6, 2017)

DOL Asks for More Information on Fiduciary Rule; 15-day Comment Period on Extending Delay

On June 29, 2017, the Department of Labor (DOL) released a Request for Information (RFI) in connection with its examination of the new fiduciary rule (including the accompanying prohibited transaction exemptions). The new definition of fiduciary and the “best interest” standards requirement (also called the “impartial conduct” standards) became applicable on June 9, 2017.* The remainder of the rule currently does not apply until January 1, 2018.

The fiduciary rule provides a new definition of who is a fiduciary under Section 3(21) of the Employee Retirement Income Security Act (ERISA) as a result of giving investment advice for a fee or other compensation with respect to assets of an ERISA-covered employee benefit plan, or under Section 4975 of the Internal Revenue Code (IRC) as a result of giving investment advice to an individual retirement account (IRA) or similar arrangement under IRC §4975.

There are 18 questions in the RFI. The first question asks whether the January 1, 2018 applicability date for the remainder of the rule should be further delayed. Comments on this question should be submitted to the DOL by July 21, 2017 (15 days after the publication of the RFI in the July 6, 2017 Federal Register).

The remaining questions concern the definition of “investment advice” and whether the current exemptions can or should be simplified. Comments on these questions are due by August 7, 2017 (30 days after the Federal Register publication date).

Sibson’s June 8, 2017 hot topic has a discussion of the June 9, 2017 applicability date and links to earlier Sibson publications on the fiduciary rule.

 

* The best interest/impartial conduct standards require fiduciary advisers to act in the best interest of participants, charge no more than reasonable compensation and avoid misleading statements.

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