New fiduciary rule’s release date confirmed in DOL's updated agenda

Unveiling its Spring Regulatory Agenda, the Labor Department said it once again will try to enact a rule that defines “fiduciary,” an effort that so far has failed, as court challenges blocked previous attempts.

However, this time, the department is calling the proposal “Conflict of Interest in Investment Advice,” according to the latest version of its regulatory agenda.

This notice comes a month after Lisa Gomez, assistant secretary of Labor for the Employee Benefits Security Administration, said that issuing a new fiduciary rule is a “huge priority” at a Spring Policy Forum.

The Labor Department now says it aims to issue a proposed rule in August, although dates in the semi-annual regulatory agenda often are considered placeholders rather than strict deadlines.

Twice a year, each federal agency publishes its regulatory agenda of actions it expects to take during the next six months. The Labor Department’s agenda includes a variety of proposals, including the one that would define “fiduciary.”

In issuing the agenda, the department said that it planned to issue a proposed rule that would more appropriately define when people who give investment advice for a fee to employee benefit plans and IRAs should be considered fiduciaries under the law.

“The amendment would take into account practices of investment advisers, and the expectations of plan officials and participants, and IRA owners who receive investment advice, as well as developments in the investment marketplace, including in the ways advisers are compensated that can subject advisers to harmful conflicts of interest,” the department said.

In conjunction with the rulemaking, the EBSA said it will examine available prohibited transaction class exemptions and propose changes or new exemptions to ensure consistent protection of employee benefit plan and IRA investors.

Related: The DOL’s 2023 agenda: A new fiduciary rule and SECURE 2.0 guidance

 In addition to the proposed fiduciary rule, EBSA, among other things, said it also plans to:

• Consult with various stakeholders about ways to improve the effectiveness of retirement plan disclosures required under ERISA. The department said it will try to balance the disclosures with the potential cost to plans and plan participants. Labor officials said that the plan is consistent with section 319 of the SECURE Act 2.0.
• Meet with stakeholders about how to implement the inclusion of pooled employer plans as a type of single employer pension benefit plan. The SECURE Act gave the department the authority to issue guidance to carry out the new provisions. The project will take into account a section of the SECURE Act 2.0 that requires the Secretary of Labor to conduct a study of the pooled employer plan industry and submit it to Congress within five years, according to the department.
• Issue a final rule to revise the department’s procedure for granting prohibited transaction amendments. Portions of the rule are designed to improve the readability of the procedure, while much of the plan will reflect changes that have occurred since the rule was last updated in 2011. The changes, the department said, will attempt to clarify the information and documentation required in an application, and revise the definition of a qualified independent fiduciary and qualified independent appraiser to ensure independence. The department also will attempt to clarify the content of specific reports and documents required, update the timing requirements to make them clearer and expand the opportunities for applicants to submit information electronically.

The fiduciary rule will also include a comment period.