DOL Fiduciary Rule Generates Uncertainty Around Incentives And Awards Programs
The Department of Labor’s “Fiduciary Rule,” an amendment to the Employee Retirement Income Security Act issued by the Department of Labor in 2016, loosens the federal government’s definition of a fiduciary—“persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA.” While elements of the rule went into effect June 9—full implementation is scheduled by January 2018—it faces new scrutiny and challenges as the Department of Labor (DOL) is reviewing it to recommend changes.
The Incentive Federation’s (IFI) analysis of the rule suggests it contains important implications for companies that offer incentive travel and awards programs to clients in the financial market. It notes, “Until there is greater clarity with respect to the new fiduciary rule, some financial institutions may be leery of using incentive or award programs to motivate and/or compensate their employees, while others are restructuring their programs to place a greater emphasis on general recognition and education, for example, instead of providing sales-based incentives.”
For more on the IFI’s analysis of the Fiduciary Rule and legislation introduced earlier this month that may affect it, click here.