Since 2012, we have heard a number of times that the Department of Labor (DOL) was going to re-propose the fiduciary definition. Well, the time has arrived; the proposed rule was finally submitted for review with the Office of Management and Budget (OMB) on Monday, February 23, 2015.
After the prior attempt to re-propose the fiduciary definition in 2010 and later withdrawing it in 2011, the DOL has submitted to the OMB for review the latest proposed rule. The new title is "Conflict of Interest Rule – Investment Advice." Typically, the review process can take up to 90 days, placing the estimated completion date during late May 2015. Some are predicting that the process could be completed sooner. Yet, there are others predicting the review may take longer than 90 days.
After the OMB returns the proposed rule to the DOL, the text of the rule will be released to the public for review. Stakeholders are allowed to submit comments and also attend public hearings. The White House fact sheet states, "Only after reviewing all the comments will the administration decide what to include in a final rule – and even once the Department of Labor ultimately issues a final rule, it will not go into effect immediately."
Reasons shared by the current administration are as follows:
Although the proposal to the OMB is not available for public access, most industry experts anticipate that the key changes from the prior proposals will be retained and could include:
If you have any additional questions, please feel free to contact Retirement Strategies Group at (800)722-2333, ext. 3939, or e-mail us at RSG@PacificLife.com.
1The Effects of Conflicted Investment Advice on Retirement Savings. United States Department of Labor. Feb. 2015.
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