Close Close

Regulation and Compliance > Federal Regulation > DOL

DOL’s Borzi: First Fiduciary Rule FAQs to Focus on BICE

Your article was successfully shared with the contacts you provided.

The Department of Labor plans to start rolling out “very soon” its frequently-asked-questions guidance on its fiduciary rule, Phyllis Borzi, assistant secretary of Labor for DOL’s Employee Benefits Security Administration, said Tuesday.

The first “wave” of FAQs will answer a “couple dozen” questions on the rule’s exemptions, including the best interest contract exemption, Borzi told reporters after her remarks during a panel discussion at the American Society of Pension Professionals and Actuaries national conference in National Harbor, Maryland, just outside Washington.

Borzi said that EBSA anticipates releasing the FAQs in “three waves,” but said that EBSA “may decide to break it up” into more than three. “There will be multiple waves” of FAQs, adding that they all won’t come this year.

(Related: 5 Big Changes Advisors Should Make by Fiduciary Rule Deadline)

She declined to offer more specifics regarding the first set of FAQs beyond stating that it focuses on the rule’s exemptions. While she said the first FAQs are imminent, she said “they’re not through clearance yet.”

Lawyers have warned recently that broker-dealers and advisors should not expect major revisions or reversals in the FAQs, just clarifications.

In the face of the impending litigation against the rule, Labor “will be particularly sensitive to reversing course in any way,” noted Josh Waldbeser, associate at Drinker Biddle & Reath, during a recent ThinkAdvisor webcast. DOL “will be sensitive to changing the meaning of the regulation” through FAQs.

ASPPA attendees, according to Brian Graff, ASPPA’s CEO, are “hoping that the fiduciary rule is limited in its application to TPAs [third-party administrators] and recordkeepers.”

April 2017 is the date for complying with the “basic core fiduciary” aspects of DOL’s rule, Timothy Hauser, EBSA’s chief operating officer, said at the recent FPA annual conference, while January 2018 is when firms must “get into full compliance if they’re going to rely on the contract exemptions.”

“Throughout that entire period” between April and January, “I’d expect our aim will be to help people comply. If we see abuse that’s egregious, we’ll take an enforcement action,” Hauser said.

Another hot top at the ASPPA conference is the proposed revisions to Form 5500 put forth by the DOL, Internal Revenue Service, and Pension Benefit Guaranty Corp. Graff called the number of proposed revisions “huge.”

Labor announced in late September a two-month extension to the comment period on the Form 5500 Modernization Proposals.

Borzi explained that the proposed revisions, for the first time, are not just “procedural” changes but instead focus on “substance.”

The proposed changes are designed to allow DOL to get a better “picture of where the [retirement] plan assets are invested” so that Labor can inform members of Congress and other policymakers.

As DOL explains in its proposal, Form 5500 Annual Return/Report is the primary source of information about the operation, funding, assets, and investments of pension and other employee benefit plans, and also serves as an “essential compliance and research tool for the DOL, IRS and PBGC.”

Other federal agencies, Congress, and the private sector also rely on the Form 5500 as an important source of information for assessing employee benefit, tax, and economic trends and policies, Labor says. 

— Related on ThinkAdvisor: