The American Retirement Association’s Government Affairs Committee has filed comments with the Department of Labor regarding a proposed regulation to extend by 60 days the applicability date for the “Conflicted Advice” regulation.
The ARA recommends that the applicability date be delayed until Jan. 1, 2018, and that transitional relief with regard to the Best Interest Contract Exemption (BICE) be extended until July 1, 2018.
The ARA further recommends that the DOL take such actions as are necessary to ensure that the effective date of the delay precedes the existing applicability date to avoid the “unnecessary expense and disruption that would be caused by uncertain and shifting compliance standards.”
The ARA’s comment letter acknowledges the preparations for the fiduciary regulation’s applicability date, but notes that President Trump’s Executive Memorandum and the (re)examination of the potential impact of the regulation on the ability of Americans to gain access to retirement information and advice “…raises the very real possibility that at some point in the future, the Regulation may be amended or rescinded.” The letter notes that if it is amended or rescinded after the April 10 applicability date, “…compliance systems would need to be modified to conform to the amendment. The resulting expense and burdens of shifting compliance standards is unnecessary and can be avoided very easily by extending the applicability date while the Department completes its review.”
The comment letter also acknowledges the recent Field Assistance Bulletin (FAB) 2017-01, but notes that there “remains concern with respect to potential IRS enforcement activities as well as private litigants,” and that therefore “…a formal, legally effective extension of the applicability date before April 10, 2017, is critical.” Recognizing that the FAB indicates the Labor Department’s intention to avoid a potential “gap” period, the comment letter also urges the Labor Department to “…meet that timeframe to avoid the need for a temporary enforcement policy.”