The June 9 "applicability date" will remain intact. What does this mean?
It was like waiting for college acceptance letters all over again. Did I get in or did I not? As my oldest son has been anxiously waiting for the next chapter of his academic career, I was waiting for the DOL to decide about what June 9 will mean to the retirement industry.
On May 22, after much fanfare about the possibility for additional delays to the DOL Fiduciary Rule, the new Secretary of Labor (Alexander Acosta) and his team finally announced their decision.
The June 9 "applicability date" will remain intact.
If you recall, last April the DOL released the final regulation defining who will be an "investment advice" fiduciary by updating the old five-part test that has been in place since 1975. Effective June 9, if a recommendation is made for a fee to clients with retirement assets (e.g., IRAs, qualified plans), it will be deemed as fiduciary advice.
On the same date, the Best Interest Contract (BIC) Exemption and other revised exemptions are available to fiduciary advisors. Nevertheless, the DOL is adopting a phased implementation of the rule and exemptions.
Related Article: How Prepared Are Advisors for the Fiduciary Rule?
Below are the requirements and expectations to comply with the new rule and exemptions.
(6/9/17 to 12/31/17)
(1/1/18 and Onwards)
Fiduciaries relying on exemptions (e.g., BIC Exemption, PTE 84-24) only have to adhere to the Impartial Conduct Standards (ICS) that requires them to:
(a) Act in a client's best interest.
Not required to implement during this period: notices or disclosures, BIC Exemption contracts, warranties of policies and procedures, etc.
|Unless the DOL concludes that changes to the rule and exemptions are necessary or that it needs more time to complete its review, full compliance with all the conditions of the exemptions will be required for firms and advisors.|
During the transition period, the DOL will be focusing on the following matters:
Feeling Overwhelmed by the DOL Fiduciary Rule? We have created a number of resources to assist you when working with your clients to meet their retirement goals.
For additional questions, please contact the Retirement Strategies Group at (800)722-2333, ext. 3939, or e-mail us at RSG@PacificLife.com.
Pacific Life, its distributors, and respective representatives do not provide tax, accounting, or legal advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor or attorney.
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products.
Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.
Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company (Newport Beach, CA) and an affiliate of Pacific Life & Annuity Company. Variable and fixed annuity products are available through licensed third parties.
No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency