Dive Brief:
- The fiduciary rule will go into partial effect on June 9 with no further delays, U.S. Labor Secretary Alexander Acosta announced via a column in the Wall Street Journal.
- The column notes that while the rule is considered a "controversial regulation," there is "no principled legal basis to change the June 9 date while we seek public input." The rule will be fully implemented Jan. 1, 2018. In the meantime DOL will continue to accept public comments about the rule.
- The rule requires brokers that offer investment advice to act in their client's best interest. While created in response to concern over growing retirement plan fees, it has faced heavy criticism from business groups and the GOP. Congressional Democrats, however, recently expressed concern that the rule would have been "permanently shelved," Fortune reports.
Dive Insight:
House Republicans asked Acosta to act on the fiduciary rule, and he did — but perhaps not as they expected.
It's been a long few months for the fiduciary rule. President Trump originally ordered the rule be delayed from the original April 10 effective date, after which he also ordered a review of the rule. But soon after, the rule was declared legal by a federal court that stated the DOL did not overstep its bounds in creating it.
Most experts agreed it would be hard to find a way to kill the rule after that. It looks like that wisdom has borne out. It will still be examined and undergo a period of comment before that date. For now implementation of the rule starts June 9, though enforcement won't begin until Jan. 1, 2018.
The National Employment Law Project favored the announcement, stating that the DOL "made the right choice in deciding not to further delay this important protection for America’s workers." On the other hand, the National Association for the Self-Employed released a statement that called the rule "an overly burdensome regulation and exactly the type of regulation President Trump promised to eliminate in order for small businesses to flourish."
In the meantime, HR should continue closely vetting plan vendors and financial advisers to protect plan participants’ investments and ensure they receive honest advice.
