In 2016, the U.S. Department of Labor (DOL) issued its final rule expanding the “investment advice fiduciary” definition under ERISA and modified the complex of prohibited transaction exemptions for investment activities as a result of the expanded definition. The new rule is scheduled to be implemented starting on April 10, 2017.
There are many opponents to the new rule, who argue that it is one of the most costly, burdensome regulations to be implemented. Joe Wilson, a Republican Congressman from South Carolina, has recently introduced the Protecting American Families’ Retirement Advice Act that that would delay the implementation of the controversial new fiduciary rule. Specifically, the bill will “provide for a 2-year delay in the effective date of a rule of the Department of Labor relating to the ‘‘Definition of the Term ‘Fiduciary’; Conflict of Interest Rule-Retirement Investment Advice’’. This delay would give policymakers, Congress and President Trump time to consider the new rule. Not unexpectedly, Rep. Wilson’s Act has the backing of financial institutions.
There have also been multiple lawsuits filed by various financial institutions against the DOL challenging the rule, and attempts to nullify the rule, all of which have thus far fallen short. We will wait and see if Rep. Wilson’s legislation has any luck.