A proposed rule updating the definition of a fiduciary will not come out in 2014, according to the Department of Labor regulatory agenda published May 23 in the Federal Register.
Now officially called the “conflict of interest rule for investment advice,” the proposal had been on the Labor Department’s regulatory docket for this August, but continuing controversy made that increasingly unlikely. The new timetable now projects the rule will come out in January 2015.
“This confirms what we had believed, and we are appreciative that the department is taking the time to work through the issues,” said Kent Mason, an attorney with Davis & Harman, which represents retirement plan sponsors and service providers.
“The key issues are the prohibited transaction rules, which could preclude small accounts and small businesses from gaining access to investment assistance unless appropriate exemptions are provided,” Mr. Mason said in an interview.
An earlier proposal was tabled in 2011 after industry protests.
Jan Jacobson, senior counsel for retirement policy at the American Benefits Council, said the previous proposal did not address rollovers in detail, which added a new issue, on top of significant pushback from Capitol Hill and the business community. “It really has to do with the complexity and the controversy,” Ms. Jacobson said.
