Brad Campbell, former head of the Department of Labor’s Employee Benefits Security Administration (EBSA), said Wednesday that he had been urging the DOL to “re-propose” its regulation amending the definition of fiduciary under the Employee Retirement Security Act (ERISA) as the proposed rule is unclear about who is a fiduciary.
However, the current head of EBSA, Phyllis Borzi (left), told AdvisorOne in an email message the same day that "with the benefit of the extensive comments that we have received to date, we believe we should be able to complete the regulation without re-proposal." Borzi plans to issue a final rule by year-end.
Campbell, who’s now counsel with the law firm Schiff Hardin in Washington, was speaking at an event in Washington sponsored by The Hartford called Your Pension at Risk: What You Need to Know. He said that the DOL’s proposed fiduciary rule “would effectively make any advisor giving advice to a plan an ERISA fiduciary.”
In a separate interview with AdvisorOne, Campbell said that if DOL failed to re-propose its fiduciary proposal, it would likely face “legal challenges.” A re-proposal of the rule is “necessary to understand what DOL really wants to do, to narrow down the problems,” he continued. “If DOL doesn’t re-propose [the rule], they give people who are going to challenge this regulation a stronger argument about a flawed process.”
DOL’s “proposed regulation is so broad,” Campbell said in the interview, and includes, for instance, applying the fiduciary rule to IRAs. “No where in the [proposed rule’s] economic analysis does it mention the impact the [fiduciary] rule would have on the IRA marketplace—[which holds] over $4 trillion of capital.” Adds Campbell: “The sheer scope of what’s going on [in the fiduciary proposal] has cause people to raise concerns.”