NEW YORK (Reuters) - The U.S. Department of Labor’s latest plan to release a new rule for retirement advisers by July may fall through due to a lack of data for a cost-benefit analysis of the proposal.
The agency has had discussions with industry trade groups in recent weeks. The information would help it show how the benefits of the rule - which would impose a higher standard for advisers serving retirement plans - outweigh the costs to the industry.
The rule, first proposed in October 2010, has raised concerns from financial advisers at brokerage firms who worry it would restrict their ability to get compensated for the sale of IRAs to individual investors.
The Labor Department already has extended its deadline on the data collection twice. In a February 16 e-mail to industry groups, it gave them until February 24 to say what data could be provided and by when.
But the agency is not letting the delay stand in its way of re-proposing the rule.
“The Labor Department is working diligently to provide a complete and robust economic analysis in the re-proposal of the fiduciary rule,” a spokesman wrote in an e-mail. “We hope that those who asked for the new analysis will step up and help us obtain data to address their concerns.”
The Department of Labor withdrew its original proposal after industry groups and members of Congress criticized the agency for not proving the benefits outweighed the costs. Agency officials had originally expected a new rule to be released early this year.
Even with all of the data it wants, it was “extremely ambitious” of the agency to say it would release a proposal by July, said Bradford Campbell, an attorney at Drinker, Biddle & Reath, who was the assistant director of the Labor Department’s Employee Benefits Securities Administration from 2006 to 2009.
Any rule first has to be approved by the Office of Management and Budget, which typically takes 90 days to review a proposal, he added.
Reporting By Jessica Toonkel; editing by Walden Siew and Andre Grenon