The U.S. Department of Labor announced that it will further delay the full enforcement of fiduciary rules pertaining to rollover and retirement plan advice.

The rules, called Prohibited Transaction Exemption (PTE) 2020-02, were set to go into effect on Dec. 20 after being previously delayed, but industry groups had been pressing the government agency to postpone full enforcement further because they claim they are having difficulties putting systems in place to meet all the rule requirements.

The U.S. Department of Labor announced that it will start enforcing the rule on Feb. 1 for investment advice fiduciaries “who are working diligently and in good faith to comply with DOL’s impartial conduct standards.”

In addition, the agency said it delay enforcing the standards’ documentation and disclosure requirements for rollover advice until June 30.

The rule stipulates that investment advice fiduciaries who rely on any of the rule’s exemptions must be able to demonstrate that the rollover advice they render to retirement plan and IRA customers is in the customers’ best interest if the advisors want to receive compensation that would otherwise be prohibited, including commissions, 12b-1 fees, revenue sharing and markups and markdowns in certain principal transactions.

“The department is convinced that this temporary and limited enforcement relief is appropriate and in the interest of plans, plan fiduciaries, plan participants and beneficiaries, IRAs and IRA owners,” G. Christopher Cosby, acting director of the Office of Exemption Determinations at the Employee Benefits Security Administration, said in a new bulletin.   

“This transition relief, while less than DOL should have provided given the expected proposal of revised rules in the very near term, is welcome and will be helpful to permit the conversion in compliance systems from the temporary enforcement policy to PTE 2020-02 on a sensible business date,” Carol T. McClarnon, a partner with the law firm of Eversheds Sutherland, said in a client legal alert.

McClarnon also said the DOL delays would reduce the cost and potential confusion created by the fiduciary acknowledgement and other disclosures required by PTE 2020-02, which now can be coordinated and transmitted with cyclical communications and disclosures sent in the ordinary course in January.

Enforcement delays will also “provide more time for vendors to perfect, and investment advisors to install, reliable solutions for obtaining and processing the comparative cost information and other documentation DOL requires … for rollover advice,” McClarnon added.