Department of Labor Fiduciary Rule Compliance Resources

Department of Labor Fiduciary Rule Background

November 30, 2017 UPDATE:

On November 27, 2017, the Department of Labor finalized plans to extend to July 1, 2019, the compliance date for certain exemptions to the rule. The extension applies to the Best Interest Contract Exemption (BICE), principal exemption and prohibited transaction exemption 84-24.

The DOL also extended temporary enforcement relief from Field Assistance Bulletin 2017-02 until July 1, 2019, so that prior to that date, the DOL will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary rule and applicable provisions of the exemptions.

UPDATED RESOURCES:

ACLI News Release (November 27, 2017)

AM Best (November 27, 2017)

Bestwire (November 27, 2017)

Eversheds Sutherland Alert (November 29, 2017)

InvestmentNews (November 27,2017)

JD Supra (November 28, 2017)

Legal NewsLine – Thrivent Lawsuit Successful (November 7,2017)

POLITICOPro (November 27,2017)

Think Advisor (November 27, 2017)

Think Advisor (November 28, 2017)

Department of Labor Fiduciary Rule Background

The fiduciary rule was introduced by the Obama administration as a means of reducing conflicted investment advice given to retirement savers in IRAs and most employer-sponsored retirement plans. The rule expands the definition of “fiduciary” to cover more advisors than under current standards and, as a result, makes certain types of compensation customarily paid to those advisors problematic. This leads to the centerpiece of the fiduciary rule: the “best interest contract exemption” (or “BIC Exemption”) that establishes the path advisors must follow in order to lawfully receive that compensation.

The fiduciary rule has had a rocky history – both roundly criticized and heralded. In early February 2017, the Trump White House issued a memorandum directing the DOL to analyze the potential impact of the fiduciary rule and consider rescinding or revising the rule. In response to the White House memorandum, the DOL delayed the applicability date of the fiduciary rule for 60 days – from April 10, 2017 until June 9, 2017. In addition, the DOL established a “phased implementation period” until January 1, 2018. During the phased implementation period, the BIC Exemption will be deemed satisfied if an advisor adheres to “impartial conduct standards,” charges no more than reasonable compensation for investment services, and refrains from making misleading statements. The transition notice, disclosure and other requirements of the BIC Exemption will not take effect until January 1, 2018.

On June 9, 2017, the DOL confirmed a general applicability date for the fiduciary rule, as well as the phased implementation period from June 9, 2017 until January 1, 2018.

Department of Labor Fiduciary Rule Compliance Resources

Even though implementation of the DOL Fiduciary Rule has been delayed until July 1, 2019, it is still prudent  for societies to develop a program to address the next level of compliance that will be involved and whether there are any DOL compliance training programs available.

With that in mind,  the Alliance has compiled this list of professionals  that provide DOL compliance training or consulting services. Please consider reaching out to any of these organizations to learn more about the types of training and consulting they can provide your society:

American College of Education –  contact professionaleducation@theamericancollege.edu

Currin Compliance Services* – contact Cailie Currin at ccurrin@currincompliance.com

Drinker Biddle Reath* – The Fiduciary Rule Delay: What Fraternal Organizations Need to Know (and Do)… – contact Bradford P. Campbell at bradford.campbell@dbr.com or Joshua J. Waldbeser at joshua.waldbeser@dbr.com

Eversheds Sutherland* – contact Gail Westover at GailWestover@eversheds-sutherland.us or Vanessa Scott at vanessascott@eversheds-sutherland.com

First Consulting Administration* – contact Jason Robins at Jason.Robbins@firstconsulting.com

LIMRA – Compliance Education Platform

National Association of Insurance Financial Advisors (NAIFA)DOL – Fiduciary Professional development

Sidley* – contact Michael Goldman at mgoldman@sidley.com

Stinson Leonard Street LLP* – DOL Fiduciary Rule Status Update for Fraternal Benefit Societies

Stinson Leonard Street LLP* – contact Todd Martin at todd.martin@stinson.com

This information will be updated as necessary.

*American Fraternal Alliance Associate Member