Labor Department Mum on Fiduciary Rule as It Awaits Review

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Kristen Ricaurte Knebel

Top officials from the Labor Department’s benefits agency were tight-lipped on the substance of the fiduciary rule delay that could come as soon as Thanksgiving.

The DOL will continue its compliance assistance policy on the fiduciary rule and its related exemptions while the agency completes its presidentially mandated review of the rule, Timothy D. Hauser, deputy assistant secretary for program operations at the DOL’s Employee Benefits Security Administration, said during a Nov. 7 meeting of the ERISA Advisory Council.

Hauser cautioned that the DOL expects firms to be making those good faith compliance efforts with the rule. If the DOL sees “egregious instances of misconduct or violation of those standards,” they will go after them, he said.

Hauser acknowledged that the agency had sent the proposed 18-month delay of key provisions of the best-interest-contract and principal-transactions exemptions to the Office of Management and Budget for final review, but was skimpy on the details. The DOL previously said a longer-term delay is necessary because it has yet to complete its review of the rule. The exemptions were set to become applicable Jan. 1, 2018, but the DOL said any revisions or changes to the rule and associated exemptions, plus the finalization of the new class exemption, can’t realistically be implemented by Jan. 1.

The DOL recently said in court documents that the rule should be published “within about three weeks of submitting” it for review. The rule was received by the OMB Nov. 1.

The Obama-era fiduciary rule requires that financial advisers act in their clients’ best interest when giving retirement investment advice. The Trump administration has delayed portions of the rule on several occasions. Parts of the rule that the DOL called the “least controversial” went into effect June 9.

Newly appointed EBSA officials, Jeanne Klinefelter Wilson, deputy assistant secretary for EBSA, and Mark W. Dundee, senior policy adviser, also attended the meeting.

The EBSA is still awaiting the confirmation of its assistant secretary, but the nominee, Preston Rutledge, may be one step closer to taking the job. The Senate Committee on Health, Education, Labor, and Pensions announced Nov. 7 that the confirmation hearing for Rutledge will take place Nov. 15.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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