Last week, the Department of Labor (“DOL”) issued a final rule that delayed the applicability date of the Fiduciary Rule until June 9, 2017. The final rule retains the same delay introduced by the DOL in its proposed rule published last month.
The final rule also delays the applicability date of the prohibited transaction exemptions (“PTEs”) issued in connection with the Fiduciary Rule. Notably, the final rule:
States that fiduciaries relying on the BIC exemption or class exemption for principal transactions need only act using impartial conduct standards from June 9, 2017 until January 1, 2018, when the remaining conditions of those exemptions become applicable; and
Permits sellers of annuity products who rely on certain previously-published PTEs to rely on those exemptions in their existing form until January 1, 2018, subject to the requirement that they act using impartial conduct standards.
We recommend that plan fiduciaries reach out to their service providers and determine whether they intend to respond to the delay. Similarly, we recommend that service providers proactively communicate their intended response to the delay to their clients.
If you have any questions regarding the impact of the Fiduciary Rule or its delay, please contact a member of our Employee Benefits Practice Group listed in the right-hand column of this page.