PLANADVISER - November/December 2017 - 6

compliance news
Legislative and Judicial Actions
DOL Approves Fiduciary
Rule Delay
The Department of Labor (DOL)
has decided to delay implementation
of the special transition period
for the fiduciary rule's best interest
contract exemption (BICE) and the
principal transactions exemption, as
well as of the applicability of certain
amendments to prohibited transaction
exemption (PTE) 84-24 for 18
months, from January 1, 2018, until
July 1, 2019.
The decision follows the review
of the delay by the Office of Management
and Budget (OMB), at the DOL's
request in early November.
The DOL plans to use the 18
months to review the numerous
public comments it has received
and to determine whether the
exemptions are appropriate in light
of action by the Securities and
Exchange Commission (SEC), state
insurance regulators and other regulators.
The president has also asked
the department to review whether
the fiduciary rule would limit Americans'
access to retirement information
and financial advice.
Throughout the transition period,
retirement savings incentives, FSI
has long supported tax reform that
safeguards the important role of
independent contractors in our
economy, and provides equitable
treatment of pass-through entities
operated by financial advisers.
We look forward to working
with members of Congress and
the
administration
purposes. "
Half of workingage
households
may be unable
to maintain their
standard of living
in retirement.
fiduciary advisers will need to keep
their clients' best interests at heart when making investment
recommendations.
The Financial Services Institute (FSI) and American
Council of Life Insurers both issued statements applauding
the delay, while the Financial Planning Coalition said it is
strongly against it.
401(k) Contributions Safe-For Now
The text of the House of Representatives' sweeping tax reform
legislation leaves 401(k) account tax-deferral limits alone.
The nearly 500-page bill builds on a nine-page framework
previously released by the Republican Party, with a number
of important changes. For example, the legislation calls for
four main tax brackets, rather than the three outlined in the
framework. It will take time to absorb more subtle details in
the technical legislation, but so far the retirement industry
reaction has been cautiously positive.
On reviewing the draft of the legislation, now approved,
Dale Brown, Financial Services Institute (FSI) president
and CEO, expressed confidence that tax incentives for
retirement accounts would be protected.. " In addition to
Bill to Strike Fiduciary Rule
Passes
The Protecting Advice for Small
Savers (PASS) Act of 2017, which
aims to repeal the Department of
Labor (DOL) conflict of interest, or
fiduciary, rule, has passed the House
Financial Services Commission.
The bill seeks to establish its
own best interest standard for
broker/dealers (B/Ds), while moving
all fiduciary rulemaking powers
to the Securities and Exchange
Commission (SEC) and away from
the Department of Labor (DOL).
It also means to erase " related
prohibited transaction exemptions
[PTEs] published April 8, 2016. "
Senate Tax Proposal Hits Deferred Compensation
Senate Finance Committee Chairman Orrin Hatch, R-Utah,
makes what is a very important procedural point about the
tax reform overhaul proposal released by Senate Republican
Party leadership: " This is just the start of the legislative
process in the Senate. " There will be, Hatch pledges, a
robust committee debate on all the policies in the bill. And,
unlike with the failed health care reform effort, there will be
an open amendment process, he claims.
Among highlights from the draft of the Senate proposal, a
sister version of a House proposal that passed on November
16, it maintains " conformity of contribution limits. " Yet, it
also applies a 10% early withdrawal tax to Section 457(b)
plans and proposes elimination of catch-up contributions for
" high-wage employees, " those making over $500,000 a year.
The proposal applies a single aggregate limit to contributions
for an employee in a 457(b) plan and elective deferrals
for the same employee under a Section 401(k) plan or a 403(b)
plan of the same employer. Thus, the limit for 457(b) plans is
coordinated with the limit for 401(k) and 403(b) plans in the
throughout
this process to ensure the final
tax reform bill achieves these
6 | planadviser.com november-december 2017 Art by Eron Hare
http://www.planadviser.com
PLANADVISER - November/December 2017

Table of Contents for the Digital Edition of PLANADVISER - November/December 2017
