Fiduciary Risk for Plan Sponsors of $50 Million+ Retirement Plan(s)

Learn the best practices on controlling and identifying the Plan Sponsor Independent Fiduciary.

The Department of Labor has imposed an 18-month delay (from Jan. 1, 2018 to July 1, 2019) of the final applicability date of the limited portion of the fiduciary rule that is not yet in force. The delay extends the transition period the DOL established to allow firms extra time to prepare for specific requirements of the three major Prohibited Transaction Exemptions (PTEs) associated with the fiduciary rule: the Best Interest Contract Exemption (BICE), Principal Transaction Exemption, and PTE 84-24, which applies to advisory transactions involving insurance and annuity contracts and mutual fund shares.
The transition period is the time between the rule's first applicability date (June 9, 2017) and the final applicability date, which is now proposed to be July 1, 2019. The delay also provides time for the DOL to prepare responses to questions President Trump directed it to address at the beginning of this year and to formulate proposed changes to the rule. It seems clear that the net effect of this review will be elimination of the contract requirement associated with BICE, and perhaps all of the rule requirements deferred during the transition period.
Not impacted by the delay is that: the 'special' carve out at $50 million now makes the Plan Sponsor the de facto Independent Fiduciary.

Faculty

John Mulligan

Mulligan Capital, Inc.