DOL Signals Move to Extend Fiduciary Transition Period, Full BIC Applicability Date
The Labor Department has submitted a proposal to the Office of Management and Budget (OMB) to extend the transition period and full Best Interest Contract (BIC) applicability date of the fiduciary regulation.
The notice – which indicates that the Labor Department intends to push back to July 1, 2019, the full BIC applicability date, while also extending the transition period to that date – came in the form of a “notice of administrative action” submitted in the U.S. District Court for the District of Minnesota where litigation regarding the fiduciary regulation brought by Thrivent Financial for Lutherans is still pending.
The notice indicates that the defendants in the case – the United States Department of Labor and R. Alexander Acosta, Secretary of Labor – are notifying the court that on Aug. 9, 2017, the Department submitted to the Office of Management and Budget proposed amendments to three exemptions, entitled:
“Extension of Transition Period and Delay of Applicability Dates From January 1, 2018, to July 1, 2019; Best Interest Contract Exemption (PTE 2016-01); Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs (PTE 2016-02); Prohibited Transaction Exemption 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies, and Investment Company Principal Underwriters (PTE 84-24).”
The notice indicates that notification of the submission becomes publicly available the morning after submission (around 10:00 a.m. on Thursday, Aug. 10).
In February, the Labor Department filed a similar proposal with OMB, subsequently proposing to extend the applicability date 60 days beyond its original April target. Just ahead of that original date, the Labor Department pushed the April 10 applicability date of the fiduciary rule back the widely anticipated 60 days to June 9 – at the same time providing some additional compliance space (the “transition period”) on the Best Interest Contract Exemption.