Highlighting the new administration’s intent to roll back Obama-era regulations, the Department of Labor has announced that it will delay implementation of the controversial “fiduciary rule” until June 9th in order to collect additional public comments.
The fiduciary rule imposes more stringent standards and requirements on investment advisors that provide advice to retirement plans and individual retirement accounts. Significant portions of the rule were scheduled to take effect April 10th, pursuant to regulations finalized during the waning months of the Obama administration. The delay in implementation suggests that the Department of Labor intends to consider various options with respect to modifying or possibly revoking the rule. The extent of any possible amendment or modification is unclear at this point. Significant modification of the rule may prove difficult because the rule was previously finalized rather than proposed or passed as an interim final regulation. Plan sponsors and investment advisors should continue to monitor the status of the rule in the coming months.
In related news, while the future of the Affordable Care Act (“ACA”) remains in political limbo, there is one recent change that will impact many taxpayers preparing to file their taxes next month. Specifically, the Internal Revenue Service has announced (contrary to its prior position) that it will accept individual tax returns that fail to disclose whether sufficient health insurance was obtained for 2016. This move hints that the IRS may not impose penalties on individuals that failed to secure adequate health insurance through their employer or another source, a requirement otherwise known as the “individual mandate” under the ACA. It remains to be seen whether the IRS will take similar action with respect to employer tax returns that certify compliance with the “employer mandate,” which covered employers are required to file by March 31st this year.