Make us your home page
Instagram

Labor Department green-lights retirement savings rule

WASHINGTON — A Labor Department rule that would set higher standards for the advice brokers give to retirement savers will go into effect June 9 without further delay, Labor Secretary Alexander Acosta said Monday.

The regulation, which is known as the fiduciary rule, was pushed back after President Donald Trump signed a memo in February asking the department to re-evaluate the rule. It was originally supposed to be implemented April 10.

In an op-ed for the Wall Street Journal that was published Monday night, Acosta said the department "found no principled legal basis" for delaying the rule further while it seeks feedback from the public about the rule and its potential impact on retirement savers.

"Respect for the rule of law leads us to the conclusion that this date cannot be postponed," Acosta wrote.

The head of the Labor Department added that he will comply with the Administrative Procedures Act, which requires agencies to send out public notices and seek input before they write or change rules. The department will seek feedback until Jan. 1.

The fiduciary rule would require brokers working with retirement savers to put their clients' interests ahead of their own. The regulation, which was more than six years in the making, is meant to help cut down on conflicts of interest in retirement advice.

Supporters of the rule say it could make it more difficult for brokers to recommend investments that could lead to a bigger payout for them, even when there may be another product that could be a better fit for the saver. The Labor Department estimated under the Obama administration that such questionable advice is costing retirement savers about $17 billion a year.

However, some financial firms and industry groups say the approach may have the unintended consequence of limiting savers' options if some brokers decide to eliminate some investments they fear will face more scrutiny under the rule.

Parts of the rule will be implemented June 9. But in guidance published Monday, the Labor Department said it will not enforce the regulation until Jan. 1, 2018.

Many financial firms have made already made adjustments to help them comply with the new standard. Over the past several months, brokerage firms have lowered fees, designed new mutual fund share classes with simpler fee structures and eliminated some commission-based retirement accounts.

The Labor Department said in the written guidance that it is still conducting the review requested by the president. Acosta also hinted that the rule could still face changes down the line. "The Labor Department will roll back regulations that harm American workers and families," he wrote.

Labor Department green-lights retirement savings rule 05/23/17 [Last modified: Tuesday, May 23, 2017 11:24am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Washington Post.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Black entrepreneur says city stiffing him on project after he endorsed Rick Baker

    News

    ST. PETERSBURG — A prominent African-American resident says his endorsement of mayoral candidate Rick Baker has led city officials to freeze him out of a major construction project along the historic "Deuces" stretch of 22nd Street S.

  2. Sen. Nelson urges FEMA to examine high number of denied flood claims

    Banking

    Sen. Bill Nelson urged FEMA on Tuesday to ensure fairness, proper oversight and transparency in processing Hurricane Irma aid following a report by the Palm Beach Post that 90 percent of Irma claims under the National Flood Insurance Program had been denied.

    Sen. Bill Nelson is calling for FEMA to ensure the flood claims process post-Hurricane Irma is fair and ethical following reports that 90 percent of claims under the National Flood Insurance Program were denied. | [Times file photo]
  3. Amazon expands in Tampa with Pop-Up shop in International Plaza

    Retail

    TAMPA — A new retailer known largely for its online presence has popped up at International Plaza and Bay Street.

    Shoppers walk past the new Amazon kiosk Tuesday at the International Plaza in Tampa. The kiosk, which opened last month, offers shoppers an opportunity to touch and play with some of the products that Amazon offers.
[CHRIS URSO   |   Times]

  4. Study: Florida has fourth-most competitive tax code

    Banking

    Florida's tax code is the fourth most competitive in the country, according to a study released Tuesday by nonprofit group Tax Foundation.

    Florida has the fourth-most competitive tax code, a study by the Tax Foundation said. Pictured is  Riley Holmes, III, H&R Block tax specialist, helping a client with their tax return in April. | [SCOTT KEELER, Times]
  5. Trigaux: On new Forbes 400 list of U.S. billionaires, 35 now call Florida their home

    Personal Finance

    The latest Forbes 400 richest people in America was unveiled Tuesday, with 35 billionaires on that list calling Florida home. That's actually down from 40 Florida billionaires listed last year when a full 10 percent listed declared they were Floridians by residence.

    Edward DeBartolo, Jr., shopping center developer and  former San Francisco 49ers Owner, posed with his bronze bust last year during the NFL Hall of Fame Enshrinement Ceremony in Canton, Ohio. DeBartolo remains the wealthiest person in Tampa Bay according to the Forbes 400 list released Tuesday. 
[Photo by Joe Robbins/Getty Images]