A “notice of administrative action” submitted by Department of Labor (DOL) attorneys to the U.S. District Court for the District of Minnesota indicates the regulator will extend the transition period preceding full implementation of the expanded fiduciary rule.
This is the venue in which one of the many examples of anti-fiduciary rule litigation is still pending, in this case the suit filed by Thrivent Financial. The filing from DOL does not itself contain the substantial detail that will presumably be included in the paperwork the regulator says it has submitted to the Office of Management and Budget. The full language will apparently be available sometime on August 10th.
The development comes mere days after the conclusion of an aggressive request for information process that drew thousands of additional retirement and investment industry comments, not just on the subject of extending the transition period but also on potentially reworking some of the basic provisions of the signature Obama-era rulemaking. Now the DOL will seemingly waste no time in meeting the widespread demand shared in the RFI responses that, at the very least, the timeline for coming into compliance with the strict new fiduciary standard and its accompanying exemptions should be lengthened.
Here is what the new document says DOL is up to: “United States Department of Labor and R. Alexander Acosta, Secretary of Labor (collectively, the “Department”), hereby notify the Court that on August 9, 2017, the Department submitted to the Office of Management and Budget (“OMB”) proposed amendments to [the following] exemptions, entitled: Extension of Transition Period and Delay of Applicability Dates From January 1, 2018, to July 1, 2019; Best Interest Contract Exemption (PTE 2016-01); Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (PTE 2016-02); Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters (PTE 84-24).”
Please note, more reliable information about exactly what is happening will be available once the paperwork submitted to OMB is published in the Federal Register.