What You Need to Know
- Labor extended the non-enforcement policy on its fiduciary rule to Jan. 31.
- Labor further extended the requirement for providing the specific reasons that justify a rollover recommendation.
- Financial institutions have expressed concern that they would incur significant additional distribution costs if the Dec. 20 compliance date wasn't extended.
Bowing to industry pressure, the Labor Department on Monday extended the non-enforcement policy on its fiduciary rule to Jan. 31.
Also, Labor “further extended the requirement for providing the ‘specific reasons’ that justify a rollover recommendation” until June 30, explained Fred Reish, partner at Faegre Drinker’s Los Angeles office, in a Monday email to ThinkAdvisor.
Labor said in announcing the extension in a field assistance bulletin that it understands that the Dec. 20, 2021, expiration date of the temporary enforcement policy “poses practical difficulties for financial institutions that are in the process of complying with the exemption conditions. Specifically, financial institutions have expressed concern that they would incur significant additional distribution costs, because the Dec. 20, 2021, expiration date does not align with their regular distribution cycle for disclosures.”
Industry trade groups have been urging the Labor Department to extend the Dec. 20 compliance date for its fiduciary advice rule. The Biden administration allowed the Trump administration’s fiduciary prohibited advice exemption, or PTE, to go into effect in mid-February.