The 2016 presidential election results could mean that the new U.S. Department of Labor (DOL) fiduciary rule does not actually get implemented next year.
President-elect Donald Trump probably could delay the fiduciary rule prior to the April 2017 deadline for initial compliance, though withdrawing it entirely would be a much more complicated process, says Jan Jacobson, senior counsel, retirement policy, at the American Benefits Council in Washington, D.C. “Republicans, in general, are not as enamored with these regulations,” she says. “Republicans have repeatedly tried to stop the new rules, over the past few years, and they might try to do something again.”
The potential impact of Trump’s election on retirement plans goes beyond the new fiduciary rule, as post-election market volatility illustrated. The day after the election, one-tenth of 1% of participants’ assets got traded, according to the Aon Hewitt 401(k) Index, says Alison Borland, head of defined contribution (DC) in San Francisco. “That is more than four times the typical trading volume,” she says.
“Participants primarily were moving out of equities and into fixed income, so they were moving to safety.” But trading subsequently returned to normal levels. When nervous participants call Aon Hewitt seeking reassurance, she says, “we explain the merit of having a long-term focus and staying the course.”
The change in administration, and the resulting impact on the industry is just one of several occurrences this year that will inform what plan sponsors need to watch out for in 2017.Story Continued