The Labor Department has pushed the reveal of its new fiduciary rule to December, according to its just-released regulatory flexibility agenda.
That's when Labor will send its rule proposal to the Office of Management and Budget for review. Such a review can take up to 90 days.
Dates set out in reg flex agendas are traditionally placeholders, and may not reflect the actual date that a fiduciary plan would be released.
"I interpret that [regulatory agenda] as meaning in the future, but still on the agenda," said ERISA attorney Fred Reish, partner at Faegre Drinker in Los Angeles.
Labor "needs to move quickly to propose updates to its fiduciary rule," said Micah Hauptman, director of investor protection at Consumer Federation of America, in a Wednesday email to ThinkAdvisor. "This administration may be running out of time and retirement savers need protections against advisory conflicts of interest more than ever."
Steve Saxon, principal at Groom Law Group in Washington, said in another email to ThinkAdvisor on Wednesday that he's "not surprised at all" with Labor's reg flex timing.
The agenda "is consistent with everything we had been hearing from DOL for a long time. Also, not surprised that they are waiting until after the mid-terms" to release a rule.
Saxon added that "it is important to note that DOL will revise PTE 84-24 to make it consistent with PTE 2020-02. Or perhaps revoke it altogether."
PTE 84-24 applies to insurance sales (life insurance and variable, fixed indexed and fixed rate annuities) and to receipt of commissions.
Phyllis Borzi, former head of Labor's Employee Benefits Security Administration during the Obama administration, added in another email that she's also "not surprised" by Labor's reg agenda, as she "had heard they [Labor] were trying to work though a couple of thorny technical issues so they were behind schedule."
Added Borzi: "I know from my own time at EBSA, other priorities imposed on the agency often slow their progress. The fundamental problem is one of resources: a handful of key policy/legal personnel are integral to everything that comes out and they are constantly being pulled off what they are working on to respond to [Capitol] Hill, front office and [White House] requests."
According to Labor's spring regulatory agenda, released Tuesday, the rulemaking would amend the regulatory definition of the term fiduciary "to more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries" within the meaning of section 3(21) of the Employee Retirement Income Security Act and section 4975(e)(3) of the Internal Revenue Code.
