401(k) Advice Rule Compliance Abandoned as Key Deadline Arrives

Many firms gearing up to comply with the Labor Department’s embattled 401(k) investment advice rule have opted to change course on compliance since two federal courts paused the regulation that was originally scheduled to begin taking effect Monday.

Both of the Texas judges temporarily stayed the implementation of the fiduciary rule and accompanying prohibited transaction exemptions in July, pending the outcome of two challenges to the rule by industry groups who say it exceeds the DOL’s regulatory authority.

The about-face that suspended the rule was not entirely unexpected among retirement and life insurance industry professionals, who had anticipated potential Administrative ...