The U.S. Department of Labor is extending a comment period for a final regulation that would allow 401(k) and other retirement plan fiduciaries to give plan participants investment advice.
The proposed final rule, published under the direction of the Bush administration, has come under some criticism from members of Congress, who say the proposal goes far beyond what was allowed under provisions of the Pension Protection Act of 2006.
The Labor Department published the proposed final regulation Jan. 21, and the rule was to go into effect March 23.
On Feb. 4, however, the Labor Department published a notice in the Federal Register postponing the effective date of that regulation. The notice also stretched the comment period on the regulation until March 6 from its original expiration date of Feb. 18 and delayed the effective date until May 22.
The delay could foreshadow “significant changes” in the investment advice regulation, according to Goodwin and Proctor L.L.P., Boston.
The delay was spurred by a Jan. 20 memo from White House Chief of Staff Rahm Emanuel. He asked agency heads to consider delaying any regulations published in the Federal Register that had not yet taken effect, to give the Obama administration a chance to review legal and policy questions raised by the regulations.
In response, the Labor Department published a proposal in the Federal Register that postpones the effective date of the final rule on retirement plan advisors and allows time for additional public comment.
The Labor Department also is asking for comments on whether it should allow the rule to take effect, issue a further extension, withdraw the rule, or propose changes.