It's unclear if the DOL will appeal the Fifth Circuit ruling. Some view an appeal as unlikely given the pro-business, anti-regulation climate being advocated by President Trump, who last year delayed implementation of the rule and ordered that it be reviewed by the DOL.
"it’s likely that the DOL will come out with a new proposed rule and exemptions in the second half of the year,” Drinker Biddle & Reath attorney Fred Reish said.
“If I had to guess, I would say that these revised rules will still say that a recommendation to take a distribution and roll over was still a fiduciary act. The interesting part would be what the new exemption will require,” Reish added.
The Fifth Circuit’s decision to vacate the DOL rule goes into effect May 7. However, if the DOL contests and the court decides to stay its decision as hearings and appeals take place, the decision to vacate the DOL’s fiduciary rule may not apply for a year or more or may be overturned, which would leave the fiduciary rule intact.