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Compliance May 27, 2014
DOL Delays Fiduciary Redefinition Proposal Again
May 27, 2014 (PLANSPONSOR.com) – The Department of Labor (DOL) is now saying its re-proposal of what it calls “Conflict of Interest Rule-Investment Advice” will be issued in January 2015.
Reported by Rebecca Moore
The new date was announced in its Semiannual Regulatory Agenda – Spring 2014. The Employee Benefits Security Administration (EBSA) first proposed the rule in October 2010, but decided in 2011 to re-propose the rule, in part due to response from the public (see “EBSA to Re-Propose Definition of Fiduciary Rule”). During a hearing, witnesses said the proposal was too broad and may disrupt established business practices of financial institutions interacting with employee benefit plans (see “EBSA Faces More Criticism on Definition of Fiduciary Proposal”).
Last October, the U.S. House of Representatives approved a bill that would delay issuance of a new proposal until 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers (see “House Approves Bill to Delay DOL Fiduciary Rule”). Criticism of the bill by industry groups continues to be made (see “Hispanic Chamber Finds Negative Impact of Fiduciary Redefinition”).
Also in January 2015, the DOL expects to issue notices of proposed rulemaking about the safe harbor for the selection of annuity providers for individual account plans, as well as including lifetime income estimates on participants’ defined contribution account statements.
The DOL also moved the date for issuance of a request for information about the use of brokerage windows in participant-directed individual account retirement plans covered by the Employee Retirement Income Security Act (ERISA) to May from April, as announced in its previous regulatory agenda (see “The DOL Retirement Plan Pipeline in 2014”). Other agency actions concerning rules for annual funding notices and summary annual reports for defined benefit (DB) plans and target-date fund disclosures have also been pushed back.
From its prior regulatory agenda, the DOL issued a proposed rule about 408(b)(2) fee disclosure guides for plan sponsors. That proposal was issued in March (see “Industry Criticizes DOL’s Call for Fee Guides”).