The Department of Labor wrapped up the latest comment period on its controversial fiduciary rule Monday .
The agency began accepting comments March 2 in two phases. Comments were accepted for 15 days on a 60-day delay of the rule. Comments were accepted for 45 days on the rule itself.
The 60-day delay was published April 7 and pushed the applicability date for the fiduciary rule to June 9.
Meanwhile, the DOL continues to post comments in batches on its website. The agency is not distinguishing between comments on the delay and those on the rule itself.
Some commenters addressed both issues. Through March 17, the DOL received 1,132 comments. As of today, the DOL posted another 138 comments received since that date.
The vast majority of those post-March 17 comments specifically address the rule and the questions posed by President Donald J. Trump in a Feb. 3 memorandum directing the DOL to study the rule further.
In his directive, Trump ordered the delay so the DOL could study whether the rule:
• Harmed or is likely to harm investors due to a reduction of access to certain retirement savings products, accounts or information.
• Resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees.
• Is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.
'Increase Litigation Costs'
“The way the rule is currently written, it will increase litigation costs significantly, and that is a cost that more likely will be passed on to retirees in the form of higher costs and/or reduced services,” wrote Matt Dicken, founder of Strategic Wealth Designers, a financial planning firm in Louisville, Ky.
The DOL is likely to spend considerable time studying the fiduciary rule over the next six weeks. What isn’t known is what direction they will take. Labor secretary nominee Alexander Acosta isn’t even confirmed yet, and rumors abound that Obama administration holdovers are deflecting attempts to weaken the rule.
“As written, the regulation harms consumers preparing for retirement,” said a comment from the American Council of Life Insurers, which called on the DOL to scrap the rule and start over. “Among other things, it limits consumer access to education and information about annuities, the only financial products in the marketplace that guarantee lifetime income.”
The DOL cannot get rid of the rule very easily, since it is already on the books. It can write new rules that reverse the fiduciary rule, but that is a lengthy process. It can also use the delay to make changes that weaken the rule.
The possibility of litigation by pro-rule entities means those changes need to be backed up by solid research.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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