Fiduciary Rule Delay Under Final Review

Reports have emerged that the Trump White House has submitted the final version of a rule to delay the implementation of the Department of Labor (DOL) fiduciary rule adopted by the previous president but left to the current leadership to implement.

The Office of Management and Budget (OMB) is among the many federal agencies that do not actively broadcast their activities; the news comes from an updated regulation tracking page on the OMB website. That page shows OMB, the entity tasked with analyzing the budgetary and economic impacts of new regulations and laws, received the text of the final version of the delay order on March 28.

A variety of sources have suggested the 15-day comment period allowed on the proposed version of the final fiduciary rule delay measure was shorter than either precedence or prudence would seem to dictate—yet the administration argued its hand was forced by the rapidly approaching deadlines assigned by the outgoing Obama administration. Indeed, it would not be easy or enjoyable for advisory firms and their plan sponsor clients to come into compliance with the stricter DOL standards, only to see them rolled back weeks or months later.

Assuming the final version will closely resemble what was proposed and commented on, it is important to note this new delay rulemaking does nothing to actually declaw the fiduciary rule and its related prohibited transaction exemptions. It is simply a measure to give the DOL more time to decide how to proceed.

It will certainly help bring clarity to the entire effort once the president’s Labor Secretary nominee is (finally) installed. Readers will likely recall the botched effort to install Andrew Puzder to the position. Now the expectation is that the new nominee, former member of the National Labor Relations Board R. Alexander Acosta, could be confirmed as soon as this week. Acosta and his deputies will then have to decide how to proceed in terms of actually removing the fiduciary rule.