New Trump memorandum likely to delay fiduciary rule

Q&A with Brandon Long

published in The Oklahoman | February 8, 2017

Last year, the Obama administration published final regulations that would significantly expand the definition of a “fiduciary” under the Employee Retirement Income Security Act of 1974. Just last week, President Trump issued a memorandum that many experts believe will delay the implementation of the new rule, which is currently set to go into effect on April 10, 2017.

In a business Q&A with The Oklahoman, McAfee & Taft employee benefits attorney Brandon Long discussed the role of a fiduciary, the intent of the new rule, and the directive issued in the memorandum.

“To the extent someone is a fiduciary, ERISA safeguards plan participants by imposing standards of care and undivided loyalty on plan fiduciaries and by holding fiduciaries accountable when they breach those obligations,” said Long.

He explained that the effect of the new fiduciary rule would be to expand advice relationships and activities that result in fiduciary status. “For example, under the new regulations, giving a retiring 401(k) plan participant advice for a fee about whether they should roll their money from their employer’s plan into an IRA would be a fiduciary act and require the person giving the advice to act in the best interest of the participant.”

The presidential memorandum, he explained, directs the Secretary of Labor to analyze the new rule to determine whether it has harmed or is likely to harm investors due to a reduction in access to retirement savings information or related financial advice. “Given these activities on Friday, it seems very likely that the regulations that are set to become applicable in April ultimately will be delayed, especially given the outcry in the past year from the financial services industry claiming that the regulations will limit the ability of individuals to receive investment information (because of fear that providing information to individuals might create greater liability.)”