On May 22, newly appointed Secretary of Labor Alexander Acosta announced that the US Department of Labor (DOL) will not delay the June 9 applicability date for the DOL’s regulation that revises who is a fiduciary when providing investment advice. Certain conditions of the two new prohibited transaction exemptions—issued at the same time as the regulation—will become applicable on January 1, 2018. Between June 9, 2017 and January 1, 2018, the DOL will conduct an ongoing examination of the fiduciary rule as directed by President Donald Trump.

In an editorial published in The Wall Street Journal on May 22, Secretary Acosta indicated that while the DOL will continue to seek additional public input on the fiduciary rule, the DOL has found “no principled legal basis” to further postpone the June 9 applicability date—even though, according to the editorial, “the Fiduciary Rule as written may not align with President Trump’s deregulatory goals.”

Secretary Acosta’s announcement coincided with the DOL’s release of additional FAQ guidance for financial advisors, retirement plan sponsors, and individual workers and retirees. The FAQs, which provide information on the transition period from June 9, 2017 to January 1, 2018, indicate the following:

• The DOL is generally aware that various service providers and institutions will need additional time to continue developing a thorough compliance approach.

• The DOL will continue to emphasize compliance assistance, rather than enforcement efforts, for plan fiduciaries, financial institutions, and others that are working diligently and in good faith to understand and comply with the rule and the accompanying exemptions.

• The DOL will follow a temporary non-enforcement policy for the transition period, under which the DOL will not pursue claims against fiduciaries and others that are working in good faith to comply with the rule. The US Department of the Treasury and the Internal Revenue Service have likewise confirmed a comparable non-enforcement policy.

• The DOL intends to proceed with analysis of the issues raised in President Trump’s February 3, 2017 memorandum, and it is possible, based on the results of the examination, that additional changes will be proposed.

While the secretary’s op-ed and the DOL’s new FAQs indicate that the fiduciary rule will continue to evolve in the long term, it is clear that the expanded definition of fiduciary investment advice and key provisions of the fiduciary rule exemptions are going into effect at 11:59 pm local time on June 9, 2017 (yes, the DOL was that specific). As a result, we will continue to work diligently with clients from all parts of the retirement industry as they prepare for compliance—both before the June 9 applicability date and thereafter.