Fiduciary Rule to Go Into Effect but DOL Provides Temporary Non-Enforcement Policy
As reported in our April 18th blog, the Department of Labor (“DOL”) officially delayed the applicability of the Fiduciary Rule for 60 days, until June 9, 2017. Given the multiple delays leading up to the proposed June 9th date and President Trump’s February 3rd executive memorandum calling for a full examination of the impact of the Fiduciary Rule, some questioned whether the Rule would be further delayed. However, on Monday, DOL Secretary Alexander Acosta wrote the DOL has “found no principled legal basis to change the June 9 date while we seek public input” and “[r]espect for the rule of law leads us to the conclusion that this date cannot be postponed.”
Although the new definition of the term “fiduciary” will become applicable on June 9th, certain provisions of the Rule will be phased in over time, with a full compliance date scheduled for January 1, 2018. On May 22nd, the DOL released a Frequently Asked Questions document and Field Assistance Bulletin No. 2017-02 that, among other things, explains that the DOL, Treasury Department and IRS will not pursue claims against fiduciaries who are working “diligently and in good faith to understand and come into compliance with the fiduciary rule and exemptions.” Pursuant to the guidance, this non-enforcement policy will last until January 1, 2018. Of note, the non-enforcement policy would not prohibit an individual from bringing a private claim against a benefit plan fiduciary for breach of the fiduciary rule.