On April 4, 2017, the Depart­ment of Labor (DOL) announced that the applic­a­bil­i­ty date for the final fidu­cia­ry rule will be extend­ed, and pub­lished its final rule extend­ing the applic­a­bil­i­ty date in the Fed­er­al Reg­is­ter on April 7. This exten­sion is pur­suant to Pres­i­dent Trump’s Feb­ru­ary 3, 2017 pres­i­den­tial mem­o­ran­dum direct­ing the DOL to fur­ther exam­ine the rule and the DOL’s pro­posed rule to extend the dead­line released on March 2, 2017.

The length of the exten­sion dif­fers between cer­tain require­ments and/or com­po­nents of the rule.  Below are the com­po­nents and when and how applic­a­bil­i­ty applies:

  • Final rule defin­ing who is a “fidu­cia­ry”: Under the final rule, advi­sors who are com­pen­sat­ed for pro­vid­ing invest­ment advice to retire­ment plan par­tic­i­pants and indi­vid­ual account own­ers, includ­ing plan spon­sors, are fidu­cia­ries. The applic­a­bil­i­ty date for the final rule is extend­ed 60 days, from April 10 until June 9, 2017. Fidu­cia­ries will be required to com­ply with the impar­tial con­duct or “best inter­est” stan­dards on the June 9 applic­a­bil­i­ty date.
  • Best Inter­est Con­tract Exemp­tion: Except for the impar­tial con­duct stan­dards (applic­a­ble June 9 per above), all oth­er con­di­tions of this exemp­tion for cov­ered trans­ac­tions are applic­a­ble Jan­u­ary 1, 2018. There­fore, fidu­cia­ries intend­ing to use this exemp­tion must com­ply with the impar­tial con­duct stan­dard between June 9, 2017 and Jan­u­ary 1, 2018.
  • Class Exemp­tion for Prin­ci­pal Trans­ac­tions: Except for the impar­tial con­duct stan­dards (applic­a­ble June 9 per above), all oth­er con­di­tions of this exemp­tion for cov­ered trans­ac­tions are applic­a­ble Jan­u­ary 1, 2018. There­fore, fidu­cia­ries intend­ing to use this exemp­tion must com­ply with the impar­tial con­duct stan­dard between June 9, 2017 and Jan­u­ary 1, 2018 and thereafter.
  • Pro­hib­it­ed Trans­ac­tion Exemp­tion 84–24 (relat­ing to annu­ities): Except for the impar­tial con­duct stan­dard (applic­a­ble June 9 per above), the amend­ments to this exemp­tion are applic­a­ble Jan­u­ary 1, 2018.
  • Oth­er pre­vi­ous­ly grant­ed exemp­tions: All amend­ments to oth­er pre­vi­ous­ly grant­ed exemp­tions are applic­a­ble on June 9, 2017.

By Nicole Quinn-Gato, JD
Orig­i­nal­ly Pub­lished By www.thinkhr.com