The DOL’s proposal comes in response to the Presidential Memorandum issued on February 3, 2017, regarding the Fiduciary Rule. The Presidential Memorandum directed the DOL to conduct an updated impact assessment on whether the Rule “may adversely affect the ability of Americans to gain access to retirement information and financial advice.” Specifically, the memorandum directs the DOL to consider whether the Rule (i) “has or is likely to harm” retirement investors due to reduced access to certain retirement product offerings and related services, (ii) has caused “dislocations or disruptions within the retirement services industry” that may adversely affect investors or retirees; or (iii) harm retirement investors due to increased prices for retirement product offerings and related services. Notably, the memorandum did not contain any specific mention of a delay in the applicability date. If the determination is made that that there is harm to investors or that the current Rule is inconsistent with the administration’s priorities, the DOL is directed to rescind or revise the rule, as needed.
With the applicability date fast approaching, and in order to have time “to complete a review of the regulation ordered by President Trump,” the DOL submitted the proposal for a delay in the applicability date of the Rule. The proposal specifies a 60-day delay during which interim period the prior regulation (including the five-part test definition of fiduciary and existing prohibited transaction exemptions) will remain in effect. Importantly, there is language in the proposal that indicates that the DOL is open to extending the delay beyond the 60-day proposal and has requested public comments specifically related to the length of the delay. We anticipate that there will be a further delay.
At this time, the fate of the Fiduciary Rule (and accompanying exemptions) remains unclear. With the change in administration and legal challenges to the Rule, there has been much speculation as to whether the Rule will survive in whole or in part in its current form.
For questions, please contact Scott Webster, Jack Cleary, Jamie Fleckner or Alison Douglass, any member of Goodwin’s ERISA & Executive Compensation Practice or ERISA Litigation Practice, or your regular Goodwin contact.
 The DOL proposal also includes a 45-day comment period regarding the “examination described in the President’s Memorandum.”