In response to recent presidential directives, the U.S. Department of Labor is taking steps to delay the applicability and effective dates of two rules. First, the DOL's Employee Benefits Security Administration (EBSA) has proposed to extend by 60 days the applicability date of the rule defining who is a “fiduciary” under the Employee Retirement Income Security Act (ERISA). EBSA is also soliciting comments on the issues raised in President Trump's February 3, 2017 memorandum on the fiduciary duty rule, which called for the agency to update its economic and legal analysis regarding the rule's impact. Second, the DOL's Occupational Safety and Health Administration (OSHA) is proposing to push back the effective date of its rule regulating occupational exposure to beryllium.
EBSA's final fiduciary rule, entitled: Definition of the Term “Fiduciary;” Conflict of Interest Rule - Retirement Investment Advice, was published in the Federal Register on April 8, 2016. The rule was slated to take effect on April 10, 2017. This rule has come under repeated attack since its publication, and has been subject to numerous lawsuits claiming it is unduly burdensome, its definitions too vague, and that the DOL exceeded its authority in implementing the rule, among other criticisms.
Likely in response to this ongoing litigation and concern, last month President Trump issued a presidential memorandum, stating the rule "may significantly alter the manner in which Americans can receive financial advice, and may not be consistent with the policies of my Administration." The memorandum directs the DOL to reexamine the rule, and to prepare an updated economic and legal analysis concerning the likely impact of the rule. This analysis must consider:
(i) Whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans' access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;
(ii) Whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and
(iii) Whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.
To this end, the DOL has issued a proposal to suspend the rule's applicability date by 60 days, and to solicit comments on the above questions raised in the presidential memorandum, as well as general law and policy comments concerning the final rule and related prohibited transaction exemptions.
Occupational Exposure to Beryllium
On January 9, 2017, OSHA published its final rule setting standards for occupational exposure to beryllium. The rule was initially set to take effect on March 10, 2017. Following President Trump's January 20, 2017 memorandum directing agencies to temporarily postpone the effective dates of recent rules to give the new administration a chance to review them, OSHA announced it would postpone the effective date of the beryllium rule until March 21, 2017. The recent notice, to be published in the March 2 edition of the Federal Register, proposes that, following a 10-day comment period, the rule's effective date be delayed until May 20, 2017. According to OSHA, this additional delay "will allow OSHA officials the opportunity for further review and consideration of the new regulations."