The U.S. Department of Labor's Employee Benefits Security Administration extended a temporary enforcement policy concerning advice fiduciaries until Jan. 31.
The policy was set to expire Dec. 20. A group of nine trade associations including the Investment Company Institute, the Securities Industry and Financial Markets Association and the Insured Retirement Institute, in a September letter to Ali Khawar, acting assistant secretary for the EBSA, urged Mr. Khawar to extend the policy.
The Labor Department said in a news release Monday that it "understands that the Dec. 20 expiration date of the current transitional relief poses practical difficulties for financial institutions. These institutions have expressed specific concern that they would incur significant additional costs to distribute disclosures because Dec. 20 does not align with their regular distribution cycle for disclosures."
Under the Trump administration last December, EBSA had finalized a prohibited transaction exemption — 2020-02 — that permits investment advice fiduciaries to receive compensation for more types of guidance, including advice to roll over assets from a retirement plan to an individual retirement account. The Biden administration allowed the exemption to take effect in February.