Some FAQ News Under ERISA - The DOL Issues Two More Sets of "Investment Advice" Q&As
The U.S. Department of Labor (the “DOL”) released two additional sets of FAQs on January 13, 2017 regarding the new “investment advice” regulation and related exemptions (the “Rule”) under the fiduciary provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Rule, adopted in 2016, is currently scheduled to become applicable on April 10, 2017. The Rule would apply to a wide range of retirement investors, including individual retirement accounts (“IRAs”) and other plans that may not be subject to ERISA.
Dechert previously published an in-depth discussion of the Rule in a May 2016 OnPoint, and followed that with six additional OnPoints on industry-specific or other particular aspects of the Rule. As we have suggested in our December 2016 OnPoint regarding the Rule, the recent election has drawn into question the survival of the Rule as revised by the DOL. It is clear, however, that the DOL, in preparing and releasing the two sets of January FAQs, is proceeding on the basis that the Rule will become effective as presently scheduled.
This OnPoint summarizes certain aspects of both sets of January 13, 2017 FAQs. The set of FAQs captioned as "Consumer Protections for Retirement Investors - FAQs on Your Rights and Financial Advisers" (the "Consumer Protection FAQs") is less substantive and more directed at general considerations for the ultimate retirement investor. These FAQs include as an exhibit a list of potential questions for the retirement investor to ask his or her provider of financial services. The set of FAQs captioned as "Conflict of Interest FAQs (Part II - Rule)" (the “COI FAQs”) supplements the DOL’s October 27, 2016 FAQs regarding various exemptions issued in connection with the amended fiduciary regulation. The COI FAQs are more technical than the Consumer Protection FAQs, and address a series of specific interpretive issues arising under the amended regulation.