Extension requested for BICE, two other PTEs to July 1, 2019
The Labor Department is proposing to extend the January applicability date of its fiduciary rule by 18 months.
In a filing with the court in the case being brought against Labor by Thrivent Financial for Lutherans, Labor Secretary R. Alexander Acosta told the court that on Wednesday, Labor submitted to the Office of Management and Budget proposed amendments to three exemptions: best-interest contract exemption; class exemption for principal transactions in certain assets between investment advice fiduciaries and employee benefit plans and IRAs; Prohibited Transaction Exemption 84-24 for certain transactions involving insurance agents and brokers, pension consultants, insurance companies, and investment company principal underwriters.
The proposed amendments extend the transition period and delay of applicability from Jan. 1, 2018, to July 1, 2019.
Notification of Labor’s OMB submission becomes publicly available the morning after submission.
Micah Hauptman, financial services counsel at the Consumer Federation of America — a staunch advocate of Labor’s fiduciary rule — told ThinkAdvisor on Wednesday that while specifics of the 18-month delay proposal have yet to be released, as CFA “made clear” in its Monday comment letter in responde to Labor’s request for information, “retirement savers need and deserve the full protections of the rule on Jan. 1.”
On that date, the Federation says, “the full protections” of BICE, the principal transactions exemption and amendments to PTE 84-24 are currently scheduled to be implemented.
“Without complete implementation of these prohibited transaction exemptions (PTEs), the full protections and benefits of the fiduciary rule won’t be realized, and retirement savers will continue to suffer the harmful consequences of conflicted advice,” the consumer group wrote.
“Unfortunately, by posing the question about whether there should be a further delay, the department is creating unnecessary uncertainty and confusion in the market. More concerning, it is creating a self-fulfilling prophecy: Firms, in anticipation that a delay will be granted, are likely to stall their compliance efforts, which the department is then likely to point to as the justification to delay.”
Investors, the group argued, “will suffer the consequences.”