President Trump Instructs DOL to Review Fiduciary Duty Rule Set to Take Effect in April

2/08/2017

On Friday, February 3, 2017, President Trump issued an executive order instructing the Department of Labor (DOL) to review the fiduciary rule regulations that had a scheduled implementation date of April 10, 2017.

Click here to read the text of the executive order.

These fiduciary rules are of interest to ECFC members since they modify the standard of care for individuals and institutions who provide investment advice and/or recommendations to IRA and HSA holders, provide a private cause of action for a breach of that standard of care, and, absent compliance with the requirements of specifically prohibited transaction exemptions, can result in the imposition of excise taxes for violation of the prohibited transaction rules under Internal Revenue Code of 1986, as amended (Code) Section 4975.  A detailed explanation of how these new fiduciary rules will impact HSAs and HSA service providers is in the June 2016 issue of the Flex Reporter.

The order itself does not change the fiduciary rule but instructs the DOL to review the rules to determine the impact of the rule on retirees and investors and to determine whether the rule should be changed.  However, the Acting Secretary of Labor released a statement yesterday stating: “The [DOL] will now consider its legal options to delay the applicability date as we comply with the President’s memorandum.”  Accordingly, we are likely to see the DOL take action to delay the implementation of the fiduciary rule until they can complete the required review.  We will keep members informed of any official action taken by the DOL to delay the regulation.

William F. Sweetnam, Jr
Legislative and Technical Director
Employers Council on Flexible Compensation—ECFC

Media Contact:

Martin Trussell
(202) 659-4300
mtrussell@ecfc.org

About Employers Council on Flexible Compensation

The Employers Council on Flexible Compensation (ECFC) is a non-profit organization dedicated to the maintenance and expansion of private employee benefit programs on a tax-advantaged basis. The organization has two driving missions. The first is to represent and promote flexible compensation programs through effective lobbying. The second is to provide information on flexible compensation programs to member, national opinion leaders and the general public to help create a positive climate for the growth of flexible compensation.