The delays are over; the Fiduciary Rule’s applicability date will be June 9, 2017. Accordingly, plan sponsors, and the financial services industry, should be prepared to comply with the rule beginning on June 9, 2017.
However, Secretary of Labor Acosta also indicated that the Department of Labor (“DOL”) will continue to seek industry and public input on how to revise the bill and eliminate its negative effects on the industry. As of now, it is unclear as to what the Fiduciary Rule will entail with its full implementation date of January 1, 2018; however, based on prior public comments from Secretary Acosta, it may still be likely that substantial revisions are on their way.
On May 22, 2017, the DOL released two pieces of guidance: 1) a Temporary Enforcement Policy, and 2) a Conflict of Interest FAQs. This new guidance comes in the form of transitional guidance and is primarily aimed at the financial services industry relating to its compliance with the rule from June 9, 2017 through January 1, 2018. Noteworthy: the DOL made clear that it will not pursue claims against fiduciaries who are acting in good faith to comply with the rule. Moreover, fiduciaries looking to take advantage of the Best Interest Contract Exemption during the transition period must only comply with the Impartial Conduct Standards. Finally, transactions that were effective prior to June 9, 2017, remain in effect under their original terms. For more information on the new DOL guidance, you can read the full text here and here.
For more information on this topic please contact a member of the firm’s Executive Compensation & Benefits Practice Group.
Eric Baisden at 216.363.4676 or ebaisden@beneschlaw.com.
Shaylor Steele at 216.363.4495 or ssteele@beneschlaw.com.
Joe Yonadi, Jr. at 216.363.4495 or jyonadi@beneschlaw.com.
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