The DOL submitted its proposal for review to the Office of Information and Regulatory Affairs within the White House's Office of Management and Budget on Sept. 8; the review process can take up to 90 days but is unlikely to take that long.
Gomez said Oct. 16 that the new rule will not be a "regurgitation of the old rule," and it will be referred to as the "retirement security rule" instead of the "fiduciary rule" to differentiate it from its predecessor.
In 2016, under the Obama administration, the department finalized a rule known as the fiduciary rule that expanded the definition of a person or entity taking on fiduciary responsibilities and replaced a five-part test previously used to determine whether an investment professional or financial institution serves as a fiduciary.
However, in 2018, a three-judge panel at the Fifth U.S. Circuit Court of Appeals in New Orleans vacated the rule in a 2-1 decision, ruling that the department exceeded its legal authority.
At the conference, Khawar admitted "there is a bit of a patchwork right now" for the regulatory framework governing fiduciary investment advice. For example, the SEC's rule package, known as Regulation Best Interest, does not explicitly include advice for plan sponsors, he said.
The Regulation Best Interest package took effect in 2020 and aims to address the obligations of broker-dealers and investment advisers when they provide recommendations or investment advice to retail investors, including rollover recommendations.
"There we have a nuance that can't be addressed by the existing framework," Khawar said. "And so, those are the kinds of questions that are on the forefront of our minds."