As a follow-up to our earlier announcement, the Office of Management and Budget (OMB) released a decision today marking the DOL’s delay proposal as “economically significant.” This decision does create new challenges for the DOL to justify their requested delay that was submitted earlier this month. This may result in a longer comment period, and ultimately more time for the Trump administration to shape the final form of this legislation.
What happens now?
The delay has not yet been approved, and the DOL now must provide an analysis of the economic impact the delay will have—leaving the April 10 implementation date still in question. The DOL is unable to make the delay rule public until it is approved by the OMB; however, it has been widely-anticipated they are seeking 180-day delay to address measures directed by President Trump in early February.
The response from the DOL to today’s OMB decision may include one of the following outcomes:
1) Conducting a cost-benefit analysis of the delay
2) Revising their proposal for a shorter delay to bypass this analysis
3) Issuing an interim final rule on the delay to take effect immediately without comment period (however, this is considered unlikely with the “good cause” requirements of interim final rules)
While the final form and timeline of the fiduciary rule continue to take shape, if you have not already taken measures to adapt to best interest standard, now is the time to take action. We will continue to maintain our proactive communications with the Department of Labor and keep you apprised of further developments.