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DOL Fiduciary News: August 21, 2017

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Fiduciary Rule Delay Comes With Its Own Set of Problems

ThinkAdvisor; August 18, 2017

While industry groups applaud the Labor Department's recent decision to seek a delay of the January compliance date for its fiduciary rule by 18 months, they say such an extension comes with its own set of problems.

The ERISA Industry Committee told Labor in a Wednesday comment letter ( that while ERIC supports a delay, “uncertainty as to plan fiduciaries’ obligations to monitor service providers’ adherence to the rule has caused some plan fiduciaries to consider directing substantial resources toward compliance costs rather than toward providing benefits,” an outcome ERIC suspects is not consistent with the department's intention in implementing the rule.

The group, which advocates for large employers on health, retirement and compensation public policies, asked Labor for “clear guidance on how plan fiduciaries can satisfy this duty to monitor that will allow them to channel the appropriate resources needed, and not more, toward this monitoring obligation.”

More liability could fall to sponsors as fiduciary rule tweaked

Pensions & Investments; August 21, 2017

Recent efforts by the Department of Labor to clarify the fiduciary rule and delay some key provisions signal relief for retirement plan service providers, but potentially more work — and liability — for plan sponsors.

"I think the bottom line for plan sponsors is, the days where you could just ignore those kinds of (record-keeper) transactions are over," said Bill McClain, a Mercer LLC principal based in Seattle. "You need to know what's on the (service provider) website, listen in on a call. You as a plan sponsor should know what's going on there."

The new rule went into effect June 9 after a two-month delay, but provisions that apply to "best interest" contracts and other arrangements between investors and service providers are scheduled to take effect Jan. 1.

Bill with Fiduciary Rule Ban, ACA De-Funding Nears House Floor

ThinkAdvisor; August 18, 2017

Members of the House Rules Committee are preparing to review a bill that could nullify the U.S. Department of Labor's fiduciary rule and eliminate federal funding for the Affordable Care Act.

The bill could also keep private insurers from using user fees to keep the ACA public health insurance exchange program alive.

The bill also could cut off all federal funding for any ACA programs.

Will fixed index annuities stay ahead of fiduciary concerns?

Financial Planning; August 21 2017, 6:30am EDT

Debate over the fiduciary rule cast annuities in a harsh light, resulting in a recent sales slump, but fixed index annuity issuers and distributors remain optimistic.

Few firms have slammed the Department of Labor rule more vocally than annuity firms and their advocates. The Trump administration pushed back full implementation of the rule by 18 months, but experts have predicted gloom for all annuities amid downward pressure on fees and commissions.

Fiduciary advocates often rip annuities, and client arbitration cases involving the product jumped 31% last year to 242, according to FINRA. Sales of FIAs shrank 13% to $13.6 billion in the first quarter, ahead of a projected 5% to 10% drop this year, according to the LIMRA Secure Retirement Institute.

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