The Department of Labor's proposal to extend the Jan. 1 applicability date for the remaining portions of the fiduciary rule until July 1, 2019, was approved Monday, according to a notice on the Office of Management and Budget website.
On Aug. 9, DOL officials proposed the delay to OMB for three exemptions — a best-interest contract; a class exemption for principal transactions in certain assets between fiduciaries and employee benefit plans; and certain transactions with insurance agents, brokers and consultants. OMB approval often can take several months.
Kent Mason, a partner with Davis & Harman in Washington who represents several major financial institutions, welcomed the step toward delay. "There is extensive data that the regulation is doing substantial harm to the very individuals it was intended to protect. The DOL needs this 'timeout' to review the regulation with an eye toward making widespread changes," he said.
Kathleen M. McBride, a founder of the Committee for the Fiduciary Standard, called it "part of a despicable effort to water down the strong and investor-friendly fiduciary standard. It is short-sighted and deplorable that the Trump DOL is playing games with retirement investors' 401(k) and IRA savings by neutering or killing the 2016 final DOL fiduciary rule."
The DOL posted its proposal to extend the applicability date on the Federal Register.