Killing Fiduciary Rule Seen as New DOL Chief’s Top Priority

Acosta ‘is still looking for a solution that could be implemented in final form before June 9,’ says ERISA attorney Reish

Labor Secretary R. Alexander Acosta (Photo: Diego Radzinschi) Labor Secretary R. Alexander Acosta (Photo: Diego Radzinschi)

Labor Secretary R. Alexander Acosta has made halting the fiduciary rule’s June 9 compliance date as a top priority, with published reports saying he’s looking for a way to freeze the rule that will “stick.”

“Our sense is that he [Acosta] is still looking for a ‘solution’ that could be implemented in final form before June 9,” Fred Reish, partner in Drinker Biddle & Reath’s employee benefits and executive compensation practice group in Los Angeles, told ThinkAdvisor on Thursday. “He seems to want an answer that cannot be challenged successfully in court. But, we think he is still looking for that answer.”

News is that Acosta told Sen. Tim Scott, R-S.C., that he “recognized the urgency of the situation” and that he is looking for a way to halt the rule — which has been delayed from April 10 to June 9.

The National Association for Plan Advisors says that according to the communication between Acosta and the senator, “Scott pressed the case against the rule, saying that it wasn’t going to hurt Wall Street as much as it will hurt everyday Americans who need access to investment advice.”

Scott and Acosta met to follow up on a letter that Scott and eight other GOP senators sent to Acosta on April 28 urging the DOL, “pursuant to the president’s memorandum and in light of the numerous concerns with the final fiduciary rule,” to carry out “the president’s directives without delay and finalize a new fiduciary rule review before any part of the rule becomes applicable.”

NAFA “is pleased by news reports that Secretary Acosta is making the fiduciary rule his number one priority and purportedly looking for ways to freeze the rule,” Eric Marhoun, chair of NAFA’s DOL steering and litigation committee, who’s also executive vice president and general counsel for Fidelity & Guarantee Life in Des Moines, told ThinkAdvisor Thursday.

NAFA launched a grassroots campaign on May 8 to appeal directly to the Trump administration as well as to Acosta to stop Labor’s fiduciary rule from taking effect on June 9.

Marhoun said the trade group “will continue pushing hard for the White House and Secretary Acosta to honor the president’s directive that this rule be studied carefully before any part of it takes effect, and hopes ultimately the rule will be repealed in its entirety consistent with the president’s agenda to eliminate wasteful and unnecessary regulations that do far more harm than good.”

The "sense is there needs to be action quickly -- within the next week or two," Marhoun added. 

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