As ordered by President Trump in last month’s presidential memorandum (the “Memorandum”), the U.S. Department of Labor (DOL) proposed a 60-day delay to its conflict of interest rule (commonly referred to as the “fiduciary rule”). The effective date of the fiduciary rule, which revised the definition of a “fiduciary” for retirement investment advice purposes, is currently April 10, 2017. In addition to a general 15-day comment period, the DOL is also accepting comments until April 16, 2017 on the Memorandum itself and on issues applicable to whether or not the fiduciary rule should be revised, revoked, or further delayed.

While the delay may result in additional confusion among the financial services industry, the DOL believes that it is the only way to avoid unnecessary disruption in the marketplace should the fiduciary rule be rescinded or significantly revised after its effective date. Already, many financial institutions and advisors have invested considerable time and effort in revising their practices and policies to comply with the fiduciary rule. Moreover, retirement plan participants and individual retirement account (IRA) holders are now arguably better educated on the current standards applicable to industry professionals and the perceived deficiencies under the Employee Retirement Income Security Act of 1974 (ERISA). Regardless, the fiduciary rule already has significantly affected the retirement services market, and may serve to further incentivize fiduciary litigation in the ERISA arena.

Photo of Virginia McGarrity Virginia McGarrity

Virginia McGarrity is a member in the firm’s Employee Benefits and Compensation Group whose practice addresses a broad array of issues relating to the design, drafting, and operation of qualified and nonqualified defined benefit and defined contribution plans, including 401(k), profit-sharing, employee stock…

Virginia McGarrity is a member in the firm’s Employee Benefits and Compensation Group whose practice addresses a broad array of issues relating to the design, drafting, and operation of qualified and nonqualified defined benefit and defined contribution plans, including 401(k), profit-sharing, employee stock ownership and Section 403(b), and Section 457(b) plans of tax-exempt organizations and governmental entities. Virginia counsels clients on a wide range of health and welfare benefits matters, including issues related to health care reform, cafeteria plans, health savings accounts, voluntary employee beneficiary associations, and other employee benefits arrangements. She also assists clients with compliance matters involving federal laws such as COBRA and HIPAA, as well as various state laws and regulations governing health and welfare plan design and administration, domestic partner coverage, continuation of coverage, and mandated benefits. Read her full rc.com bio here.