PLANADVISER - Winter 2023 - 5

Fiduciary Rule Proposal:
Comment Period Is Firm
Stakeholders in the retirement, insurance and investment
industries had called on the Department of Labor
to double the comment period for a new fiduciary rule
proposal from 60 days to 120 days.
The Employee Benefits Security
Administration has denied requests
for an extension of the comment
period on the fiduciary adviser
rule proposal, declining to heed
the advice of, among others, 18
organizations that sent a letter to
the regulator. The DOL's proposed
amendments to the Employee
Retirement Income Security Act
were announced October 31.
Assistant Secretary of Labor Lisa
Gomez, in a response to the Securities
Industry and Financial Markets
Association, wrote that EBSA had
engaged informally with many
stakeholders prior to the proposal's
publication. Gomez, who heads
EBSA, added that the agency has
been working on regulating this
space since about 2010 and was
already familiar with the issue.
" At this point, EBSA does not intend
to extend the comment period or
delay the hearing, " Gomez wrote
in the letter. " If you or any of your
members would like to discuss any
issues in the proposed rulemaking
package with EBSA, we would be
happy to set up a meeting, which
would become part of the public
record for the proposal.
The comment period runs from
November 3 through January 2,
2024, leaving 39 business days to
file comments.
The DOL had also announced
a public hearing to discuss the
proposal approximately 45 days
after its publication.
Previous iterations of the proposal, in
2010 and 2016, each had a 90-day
comment period with extensions.
The new proposal reframes " regular
basis " and " relationship of trust and
confidence " as regular one-time
recommendations made to investors
in general, that is, in the ordinary
course of the firm's business.
The regulators are looking to swap
the current five-part test with a
three-part test to define whether
an adviser is acting as a fiduciary.
A recommendation would trigger
fiduciary status if the person:
has discretionary authority over
retirement plan assets; identifies
himself as a fiduciary; or renders
paid advice on a regular basis
to retirement investors that could
inform their decisions concerning
retirement assets.
The proposal would also update
Prohibited Transaction Exemption
84-24, which lets insurance agents
receive a commission for the sale
of annuities to retirement investors.
Further, the proposal would bring
requirements from PTE 2020-02 into
84-24, so insurance agents have
the same standards of care when
making annuity sales that fiduciary
advisers do. -Alex Ortolani
Annuity
Sales
In the first 9 months
of 2023, total annuity
sales increased 21%
to $270.6 billion.
Source: LIMRA, U.S. Individual Annuity
Sales Survey, preliminary results
'Peak 65'
Worries
Advisers expressed
concerns they cannot
help clients have
enough to live on as the
country nears " peak
65 " retirement in 2024,
when more Americans
will reach retirement age
than in any previous year.
59% of the investment
advisers who were
surveyed reported
allocating a portion
of client portfolios
to annuities both for
purposes of a regular
" paycheck " in retirement
and as a substitute for
fixed income.
But almost 20% of the
advisers said they are
skeptical of the solution.
Source: RetireOne and Allianz, 2023 RIA
[Registered Investment Adviser] Protected
Accumulation and Retirement Income Survey
Plan Management | Winter 2023 | planadviser.com 5
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PLANADVISER - Winter 2023

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