The U.S. Department of Labor has released its package of proposed changes to the regulation defining fiduciary advice and to the exemptions for conflicts and compensation for investment recommendations to retirement plans, participants (including rollovers), and IRAs.
- The Department of Labor’s proposed fiduciary “package” expands the scope of fiduciary status (to include, e.g., one-time recommendations) and the types of transactions that are covered by fiduciary advice.
- That is particularly important since, where the fiduciary recommendation involves a conflict of interest (e.g., a new fee or a commission), the firms and their representatives and agents will need to satisfy the conditions of either PTE 84-24 or PTE 2020-02.
- The comment period for the proposed regulation and exemptions is over. The DOL now starts the process for finalizing the guidance and determining the effective date.
The DOL published its proposed fiduciary regulation and prohibited transaction exemptions in the Federal Register on November 3, 2023. That was the beginning of a process that will end with the final rules and their effective and applicability dates.
The “effective” date is the day on which the guidance becomes final as a regulation or exemption. The “applicability” date is the day on which the new rules must be complied with. The proposals said that the effective date and the applicability date would be the same. However, that may not be the case with the final rules.
This article is my best guess about the timing of the process to complete the DOL’s work.