The Employee Benefits Security Administration will be taking more time to think about how it should regulate retirement plan advice providers.
EBSA, an arm of the U.S. Department of Labor, says it will wait at least until May 22 to begin enforcing the new final rule on providing investment advice to plan participants.
The rule, which implements parts of the Pension Protection Act of 2006, was released Jan. 21 and had been scheduled to take effect Friday. The final rule would permit plan fiduciaries to provide investment advice to plan members, if the fiduciaries take steps to assure that they do not benefit from the advice they offer.
The Labor Department has received 26 public comment letters on the final rule, EBSA officials report.
“The department has decided to postpone for 60 days the effective and applicability dates of the final rule to give it time to review legal and policy issues raised” by the letters, officials say.
The department first signaled that it might delay the effective date of the final rule in February, when it extended the public comment period for the final rule.
Critics of the final rule, including Reps. George Miller, D.-Calif., and Robert Andrews, D.-N.J., said the regulation would create conflicts of interest and possibly give unscrupulous sales representatives unregulated access to consumers’ retirement savings.
Advocates of the investment advice effort have argued that the current system now leaves 401(k) plan participants and individual retirement account holders without read access to any kind of retirement planning and investment allocation advice.