The Office of Management & Budget of the White House has approved the Department of Labor’s request to push back the final implementation date of its fiduciary rule — originally scheduled for January — to July 2019, the Wall Street Journal reports.
The 18-month delay will become official once the DOL announces it in the Federal Register, which experts tell the Journal could happen this week. The OMB said it approved the proposal with an unspecified change, FA-IQ sister publication Ignites writes. The OMB serves the U.S. president in overseeing the implementation of his vision across the Executive Branch.
Earlier this month, the DOL had sought a delay of the final deadline for advice firms to comply with the rule, which purports to require retirement account advisors to put clients’ interests first. Experts tell the Journal that the DOL will likely significantly revamp the final rule during the scheduled re-evaluation period.
“There are so many moving pieces here,” Joshua Lichtenstein, an employee benefits attorney at Ropes & Gray, tells the paper.
He also says that the OBM’s approval suggests the DOL has already prepared a new economic appraisal of the rule since it requested the original delay, according to the Journal.
The rule was scheduled for partial implementation last April but the Labor Department pushed that date back to June following a February memorandum from president Donald Trump directing the DOL to review the rule.
The DOL’s fiduciary rule also faces opposition from industry groups in the courts as well as legislative challenges from GOP lawmakers.
Experts have said the rule isn’t likely going away entirely, but consumer advocates have raised concern that any further delays would weaken the rule’s consumer protection powers.
Critics of the rule, meanwhile, say it squeezes out lower-income savers from being able to afford retirement advice.