At more than 120 pages, the Department of Labor's latest proposal for a fiduciary standard should be fully digested and evaluated before public comments are sought by the agency.
The latest proposal offers seven separate rules for consideration. Each deals with specific components of the fiduciary definitions. They are as follows:
- Definition of the Term Fiduciary; Conflict of Interest Rule Retirement Investment
- Proposed Best Interest Contract Exemption
- Proposed Class Exemption for Principal Transactions in Certain Debt Securities between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs
- Proposed Amendment to Prohibited Transaction Exemption (PTE) 75-1, Part V, Exemptions From Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefit Plans and Certain Broker-Dealers, Reporting Dealers and Banks
- Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction Exemption (PTE) 86-128 for Securities Transactions Involving Employee Benefit Plans and Broker-Dealers; Proposed Amendment to and Proposed Partial Revocation of PTE 75-1, Exemptions From Prohibitions Respecting Certain Classes of Transactions Involving Employee Benefits Plans and Certain Broker-Dealers, Reporting Dealers and Banks.
- Proposed Amendments to Class Exemptions 75-1, 77-4, 80-83 and 83-1
- Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction Exemption (PTE) 84-24 for Certain Transactions Involving Insurance Agents and Brokers, Pension Consultants, Insurance Companies and Investment Company Principal Underwriters
As with any set of proposed rules, there will be much debate, comment and analysis before anything is finalized. Labor officials said they will announce the date of an upcoming hearing to solicit public comments.
They later will follow up with a 75-day notice and comment period.
The changes are significant, and anyone involved in the administration of retirement plans, fiduciaries of these plans and advisers to retirement plans should watch these rules as they develop.
Keith R. McMurdy is a partner with Fox Rothschild in New York, focusing on labor and employment issues. Read his blog here.
- Is Your Rollover Business at Risk Under Fiduciary Plan?
- A Fiduciary's Perspective on the DoL's Consumer Protection Proposal
- Tougher Rules But Flexible Comp Under New Fiduciary Proposal