The NAFA Advocacy Update is designed to provide you with quick information on current legislative and regulatory issues at both the state and federal levels, so you can stay informed on key events impacting our industry.
DOL Fiduciary Duty Rule: A Timeline
On April 14, 2015, the Department of Labor (DOL) issued a long-awaited proposed fiduciary rule, its latest attempt to protect investors from conflicting investment advice, despite audible concern from legislators and the industry. On April 8, 2016, the rule was issued in final form and published in the Federal Register. Below is a timeline of the release of materials from the DOL, as well as NAFA in response to the proposed and final rule, and key media coverage of the issue.
Post Issuance of Final Rule
March 14, 2017- NAFA has submitted a comment letter to the DOL regarding the proposed 60-day delay of the fiduciary rule’s applicability date. As the comment letter makes clear, NAFA strongly supports a proposed delay to give the DOL time to review significant questions of law and policy raised by the rule and in support of the memorandum issued by the President on February 3, 2017.
February 17, 2017 – NAFA files a comment letter in general opposition to the Department’s Proposed Best Interest Contract Exemption for Insurance Intermediaries. Recognizing that the Proposed Exemption would have devastating effects on IMOs – particularly on small and mid-size organizations, many of which are NAFA members – NAFA’s comment letter addressed, in particular, the arbitrary and unjustifiable $1.5 billion premium threshold and the 1%-of-premium ‘financial responsibility’ set-aside requirement that IMOs would need to meet in order to qualify under the exemption.
November 29, 2016 – NAFA files an emergency motion for an injunction pending appeal with the U.S. Court of Appeals for the District of Columbia Circuit in its continued fight to stay the DOL rule.
November 23, 2016 — District of Columbia federal judge Randolph D. Moss denies NAFA’s renewed motion for a preliminary injunction to stay the applicability date of the Department of Labor’s fiduciary rule scheduled to go into effect April 10, 2017.
November 7, 2016 — Following a federal district court decision upholding the Department of Labor’s fiduciary rule, NAFA announces plans to appeal to the D.C. Circuit Court of Appeals.
October 27, 2016 – The Department of Labor (DOL) issues its first set of guidance related to the fiduciary rule in the form of 34 FAQs for industry professionals.
August 25, 2016 – A hearing on a motion for preliminary injunction and summary judgment was held in the United States District Court for the District of Columbia in Washington, D.C. in NAFA’s lawsuit against the Department of Labor.
June 16, 2016 – NAFA hosts a webinar “NAFA Versus Department of Labor: The Challenge Is Now in the Courts” to provide an update from Capitol Hill.
June 2, 2016 – NAFA files a lawsuit in D.C. District Court against the Department of Labor alleging the rule will cause “irreparable harm” to members and minimize or eliminate consumer access to the products and professionals they need to secure their retirement future.
April 26, 2016 – NAFA issues a statement indicating its support of Congressional efforts to stop DOL’s fiduciary rule.
April 21, 2016 – The NAFA Board of Directors authorizes action on the Department of Labor’s fiduciary rule.
April 6, 2016 – NAFA responds to the issuance of the U.S. Department of Labor’s fiduciary rule in its final form.
Final Fiduciary Rule
April 6, 2016 – Available in Federal Register Vol. 81, No. 68
Best Interest Contract Exemption
Class Exemption for Principal Transactions
Amendment to PTE 75-1, Part V
Amendments to and Partial Revocation of PTEs 86-128 and 75-1
Amendments to Class Exemptions 75-1, 77-4, 80-83 and 83-1
Amendment to and Partial Revocation of PTE 84-24
Post Issuance of Proposal
December 9, 2015 – Senator Ron Johnson, Chairman of the Committee on Homeland Security and Governmental Affairs, submits a letter to the chairman and vice chairman of the Senate Appropriations Committee requesting use of an omnibus appropriations bill to prohibit the DOL from implementing the fiduciary duty rule based on DOL’s unwillingness to share requested documentation and to address concerns from career, nonpartisan, professional experts from within the SEC, Treasury and FINRA regarding issues with the proposal.
December 4, 2015 – Senators Robert Portman and Benjamin Cardin submit a letter to the DOL highlighting concerns about the current proposal and urging Secretary Perez to request Congressional involvement in examining the larger retirement policy framework and designing updates to the system if needed before finalizing a rule.
October 30, 2015 – A group of 47 Democratic members of Congress submit a letter to the DOL highlighting concerns about the current proposal and recommending that upon determining the specific changes that will be made, the DOL open a 15-30 day comment period prior to finalizing the rule to help prevent unintended harmful consequences for low and middle income savers.
October 9, 2015 – NAFA’s Government Relations Committee (GRC) completes a summary breaking down the current Prohibited Transaction Exemption (PTE) 84-24, how it would be impacted by the proposed fiduciary duty rule and NAFA’s summary of concerns with these changes to help members better understand the potential ramifications.
September 24, 2015 – NAFA files its second comment letter to provide the Department of Labor-Employee Benefits Security Administration with further feedback and insight on the Department’s Proposed Conflict of Interest Rule (RIN 1210-AB32) and the Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction Exemption 84-24 (ZRIN 1210-ZA25).
August 10-13, 2015 – Upon conclusion of the public comment period, the DOL scheduled four days of public hearings to get a better perspective from organizations representing all sides of the issue.
Access the public hearing transcripts below.
August 12, 2015 – The Secure Family Coalition, of which NAFA is a member, releases two commercial video spots that will air in a nationally televised fiduciary public affairs campaign.
View the television spots by clicking on the videos below.
August 6, 2015 – A bipartisan group of Senators members submits a letter to the DOL highlighting issues in the current proposal and encouraging Secretary Perez to ensure DOL revisits and revises the proposal based on public comment letters and feedback.
July 29, 2015 – A bipartisan group of Congressional members submits a letter to the DOL highlighting issues in the current proposal and encouraging Secretary Perez to ensure DOL revisits and revises the proposal based on public comment letters and feedback.
July 21, 2015 – The U.S. House of Representatives’ Committee on Education and the Workforce files its official comment letter citing express opposition to the Department of Labor’s proposed fiduciary duty rule, highlighting many concerns similar to those in NAFA’s comment letter.
July 21, 2015 – NAFA files its official comment letter with the Department of Labor-Employee Benefits Security Administration in regard to the Department’s Proposed Conflict of Interest Rule (RIN 1210-AB32), the Proposed Best Interest Contract Exemption (ZRIN 1210-ZA25), and the Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction Exemption 84-24 (ZRIN 1210-ZA25).
July 17, 2015 – A new Oliver Wyman study titled The Role of Financial Advisors in the U.S. Retirement Market recently filed with the DOL is available, providing detailed information about the “intangible” benefits advisors provide to consumers.
July 13, 2015 – The U.S. Chamber of Commerce releases an infographic identifying the threat the DOL proposal poses to small business retirement savings if passed without modification.
June 26, 2015 – Cliff Andrews, president of CapCity Advocates, provides a summary of the DOL proposal in the Federal Roundup for the July/August 2015 edition of NAFA’s Annuity Outlook magazine.
June 25, 2015 – NAFA hosts “Annuity Leadership Forum Recap & DOL Proposal Update,” a webcast featuring Executive Director Chip Anderson and Cliff Andrews, president of CapCity Advocates.
June 24, 2015 – NAFA issues two pieces with the help of Jack Marrion, its director of research, regarding the truth about what’s in the DOL proposal.
June 23, 2015 – Senate joins House in effort to deny DOL fiduciary funding.
June 18, 2015 – NAFA members descend upon Capitol Hill expressing concerns about the proposal with members of Congress and leave behind two documents indicating the organization’s position.
May 19, 2015 – NAFA hosts “Update from the Front Lines: Breaking down the DOL’s Fiduciary Duty Rule,” a webcast led by Cliff Andrews, president of CapCity Advocates.
May 6, 2015 – NAFA issues a press release in response to Senator Warren’s request for annuity sales information from leading insurance carriers.
April 30, 2015 – NAFA issues a press release in response to the DOL’s proposal.
April 20, 2015 – Available in Federal Register Vol. 80, No. 75
Proposed Conflicts of Interest Rule, Definition of “Fiduciary” – 29 CFR 2510.3-21
(80 FR 21928, rule text begins on page 21956)
Proposed Best Interest Contract Exemption – 29 CFR 2550 (80 FR 21960, rule text begins on page 21983)
Proposed Amendment to PTE 84-24 – (80 FR 22010, rule text begins on page 22018)
DOL’s Regulatory Impact Analysis – EBSA Conflicts of Interest RIA (The 11-page Executive Summary of the RIA provides a good understanding of the DOL’s position.)
Definition of “Fiduciary” – 29 CFR 2510.3-21
PTE 84-24 – See 71 FR 5887, as amended 2006
Prior to Issuance of Proposal
March 4, 2015 – Key Lawmakers Urge OMB to Wait for SEC to Act on Fiduciary Standard.
February 27, 2015 – NAFA urges the DOL to proceed with caution regarding the forthcoming new version of the fiduciary rule proposal.
February 23, 2015 – The White House issues a paper on “The Effects of Conflicted Investment Advice on Retirement Savings” issued by the Council of Economic Advisers.
February 23, 2015 – President Obama delivers a speech to AARP on the DOL’s initiative to reintroduce a fiduciary duty proposal.