New Fiduciary Rule Delayed

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When I was a freshman at Stony Brook, there was a shooting on campus as a rap concert when this rapper Special Ed didn’t want to perform after arriving at 2 am for a show that was supposed to start at midnight. The problem was that Stony Brook University police officers weren’t armed. They would have to wait for Suffolk County police officers to show up at the campus entrance.

So the University President John Marburger decided that it was the time after this concert to figure out whether campus police officers should be final armed. It took Marburger two years to decide to arm the police.

For someone who was just involved in student politics, I didn’t understand what took so long. I wasn’t old enough to understand the political implications that required Marburger to finally make a decision and the reasons why it took him so long. There is such much back and forth on how decisions are made and a good chunk of the time, money talks.

The Department of Labor (DOL) just announced that they were delaying the implementation of a new fiduciary rule for retirement plans and individual retirement accounts. They claim it will be released in 2015.  How many years it will take to be finally implemented, they didn’t say.

What is taking so long? A lot of pressure and a lot of money. The pressure is coming from Congress and Wall Street groups that don’t want brokers to be treated as fiduciaries. The money is coming from Wall Street groups to the coffers of Congressmen who don’t want the DOL to implement a rule. Heck, Wall Street groups are even creating dubious reports that plan sponsors will ditch their retirement plans if the fiduciary rule is changed. They said the same thing about fee disclosure and we saw how that didn’t happen.

It’s politics and the DOL has to walk a tightrope between competing interests to develop a rule that will serve as a compromise that neither side will be happy about, but those folks don’t have the political pressure that the DOL has been weathering for years with the new fiduciary rule and fee disclosure regulations.

While reasonable people can easily make decisions, there is nothing reasonable when it comes to anything coming out of Washington D.C.

Topics:  Breach of Duty, Compliance, DOL, Fiduciary Duty, IRA, Retirement, Retirement Plan

Published In: Elections & Politics Updates, Finance & Banking Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

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