The White House memo supporting the Department of Labor’s revised rule to redefine fiduciary in retirement plans is “overly broad in condemning the industry and fairly conclusory without citing a lot of specifics,” former Minnesota Gov. Tim Pawlenty said Wednesday.
The former Republican presidential candidate, now CEO of the Financial Services Roundtable, told reporters after an FSR event in Washington that while there may be “concerns about the way that brokers are behaving” when giving retirement plan advice to retail investors, the leaked White House memo drafted by President Barack Obama’s chief economic advisor, Jason Furman, “was sweeping” in addressing such concerns “without citing specific data.”
Concerns about brokers’ behavior in retirement plans “should be addressed in a way that isn’t overly broad and not so burdensome that they shut off the availability of advice to low- and moderate-income investors,” Pawlenty said.
In a Jan. 13 internal memo to senior White House advisors that was obtained by ThinkAdvisor, Furman, chairman of Obama’s Council of Economic Advisers, states that the DOL redraft “represents a middle ground,” and that he agrees with DOL that the current regulatory environment allows brokers to give “conflicted” advice, costing retirement savers more than $6 billion a year.
DOL’s redraft of its rule to amend the definition of fiduciary under the Employee Retirement Income Security Act, which is expected to reach the Office of Management and Budget any day now, must go through a 90-day review by OMB.
ThinkAdvisor reported last July that the White House’s National Economic Council would be performing “industry outreach” regarding the DOL’s fiduciary redraft. The NEC was part of a White House working group charged with overseeing the DOL fiduciary redraft.