New DOL Fiduciary Rule to be Unveiled Today
The Department of Labor’s much-anticipated, and highly controversial, new retirement security rule – referred to as the fiduciary rule by many industry insiders – will reportedly be released today at 3:30 p.m. Eastern Time at a White House event expected to be attended by President Joe Biden.
The DOL previously submitted a proposal to the Office of Management and Budget that “would amend the regulatory definition of the term fiduciary… [to] more appropriately define when persons who render investment advice for a fee to employee benefit plans and [individual retirement accounts] are fiduciaries.”
This new amendment will cover the practices of investment advisers, plan sponsor and participant expectations, and owners of IRAs who are receiving investment advice. It will also take into account investment marketplace developments, including any compensation structures which may subject advisers to conflicts of interest.
The proposed rule has been under review since September and, once the proposed rule is opened for public comments today, the comment period is expected to last for 60 days. The DOL will then take these comments into consideration and begin to structure the final regulation, a process which will likely take another 60 to 90 days. From there it will go back to the OMB for review and, after another 30 to 60 days, it will be published in its final form in the Federal Register.
As previously reported by The DI Wire, the DOL has been pursuing the higher advice standard since 2016, when a fiduciary rule that broadened the definition of a person or entity taking on fiduciary responsibilities and replaced a five-part test used to decide who was fit to serve as a fiduciary was proposed but later struck down in 2018 by a federal appeals court. A similar, less rigid version of the rule was finalized in 2020 during the Trump administration. The current version of the new rule has also faced stiff resistance, with opponents claiming it will hurt retail investors and their ability to save for retirement.
Click here to visit The DI Wire directory page.
