The Department of Labor’s (DOL) Fiduciary Rule affecting retirement plans is set to take effect on April 10th 2017. Depending on how the rule is interpreted, this may result in some vendors updating their plan sponsor agreements.
Since the new rule expands the definition of investment advice to many participant discussions and recommendations, service providers will need to clearly distinguish what services qualify as non-fiduciary investment education and fiduciary investment advice.
Providers who offer only education may need to effectively limit these services to comply with the ruling. Conversely, those who offer investment advice may need to amend their services to ensure their interests are aligned with those of the plans they advise (potentially requiring new policies be implemented to address conflicts).
While it is still unclear if President Trump will delay or repeal the ruling, we encourage plan sponsors to understand how your vendor is interpreting the rule and the impact it may have to your plan.