In an editorial in the Wall Street Journal yesterday, Department of Labor Secretary Alexander Acosta stated that the DOL’s fiduciary rule will become effective June 9, 2017. “We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” he wrote and added, “Respect for the rule of law leads us to the conclusion that this date cannot be postponed.”
The rule was published in April 2016 and requires those who provide retirement investment advice to adhere to a fiduciary standard and put their clients’ best interest before their own profits. The rule also prohibits fiduciaries to plans, plan participants, and individual retirement account (IRA) owners from receiving payments creating conflicts of interest unless they comply with conditions designed to minimize the potential effects of a conflict. It was initially scheduled to take effect April 10, 2017.
Prior to the effective date, President Trump directed that the rule’s implementation be delayed for 60 days until June 9, 2017 so that the DOL could assess the regulation for changes or repeal. At the same time as Secretary Acosta’s announcement, the DOL published a field assistance bulletin and frequently asked questions to assist fiduciaries with compliance beginning on June 9 while the agency continues its final review prior to the full implementation date of January 1, 2018.
During the time between June 9, 2017 and January 1, 2018, the DOL’s temporary enforcement policy states that “the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.” That’s good news for fiduciaries.
ThinkHR will continue to monitor developments and report on the final implementation of the rule.