DOL Fiduciary Rule becomes effective June 9, 2017, but no enforcement prior to January 1, 2018
The Department of Labor’s new fiduciary rule significantly expands who will be considered a fiduciary of an employee benefit plan or IRA. The new rule was originally scheduled to become effective on April 10, 2017. Pursuant to the direction of President Trump, the effective date was delayed for 60 days. The rule will now become effective on June 9, 2017, although parts of the rule are being phased in and will not become fully effective until January 1 of 2018.
The DOL continues to study the rule, and it is possible additional changes will be made to the rule before it becomes fully effective. Given the uncertainty that has existed over when and if the new rule will become effective, and the lead time plan sponsors, brokers and other advisors will need to develop new policies and procedures to comply with the new rule, the DOL recently announced that it will not pursue claims against fiduciaries for violating the rule before January 1, 2018, provided the fiduciaries are working diligently and in good faith to comply with the new rule.
This moratorium on enforcement of the new rule until January 1, 2018 is a positive step by the DOL, and will give benefit plan and IRA advisors and consultants additional time to digest the new rule and design and implement compliance methods.
Please contact Charlie Berquist if you are a plan sponsor, broker, or other advisor with questions about the new rule.