The White House’s National Economic Council will be performing “industry outreach” regarding the Department of Labor’s redraft of its rule to amend the definition of fiduciary under the Employee Retirement Income Security Act, according to an industry official.
Kent Mason, a partner with Davis & Harman in Washington, told ThinkAdvisor in an email message that the White House working group “is in the information gathering stage, and has not made any decisions” regarding the DOL’s fiduciary redraft, and that ”the NEC is part of the White House working group.”
“My sense is that the working group will likely be focused on the big picture policy questions, not the drafting issues” regarding DOL’s rule, Mason added.
The DOL fiduciary regulation is “probably the most important regulatory initiative that we’ve had in [Washington] DC in the last 20 years,” Steve Saxon, chairman of Groom Law Group, said Tuesday during his comments at the Insured Retirement Institute’s Government Legal & Regulatory conference in Washington. “Rarely do you see the level of interest at the White House” that the DOL fiduciary rule has gotten.
Saxon said during his remarks at the IRI event that in his conversations with DOL officials, he’s stressed that if the fiduciary redraft — which the DOL has now pushed to a January 2015 release date — expands the definition of fiduciary under ERISA, then the department “has to make the [rule’s] exemptions workable.”
Noting that “nobody knows” what DOL’s fiduciary redraft will look like, Saxon said it’s important to “focus in on at what point in time do [retirement plan advisors] become fiduciaries in the sales process; if you become one earlier in the process, then the need for exemptions will be more important.”
Saxon said that any DOL redraft would have to go through a “multi-month comment period, then hearings, then [DOL] would have to digest” that feedback. Such timing would likely push any release of a final rulemaking right in the midst of the 2016 presidential election, which Saxon opined would be doubtful.
However, despite continued pushback from the broker-dealer and insurance industries on the controversial rulemaking — and delays — Saxon told ThinkAdvisor that he doesn’t believe that Phyllis Borzi, assistant secretary of labor for DOL’s Employee Benefits Security Administration, the main architect of the fiduciary rule, “is ever going to give up” on making sure the fiduciary redraft sees the light of day.
Check out The Search for Better 401(k) Advice by Michael Finke on ThinkAdvisor.