Top executives at the U.S. Chamber of Commerce have shared their concerns about the DOL’s upcoming rerelease of its fiduciary rule with Labor Secretary Thomas Perez and National Economic Council Director Jeffrey Zients.
In a letter late Thursday, two Chamber leaders highlighted concerns with the DOL’s reliance on prohibited transaction exemptions to “mold” the definition of fiduciary under the Employee Retirement Income Security Act, as well as the DOL’s attempts to regulate rollovers.
David Hirschmann, president of the Chamber’s Center for Capital Markets Employee Benefits Competiveness, and Randel Johnson, senior vice president of Labor Immigration and Benefits, say they “are troubled by the possibility of a rule with an overly broad application and significant reliance upon administrative prohibited transaction exemptions,” or PTEs, to shape a revamped fiduciary definition, according to the letter.
Under this approach, they continue, “everything is prohibited unless DOL specifically allows it. Almost by definition, this will create a rigid one-size-fits-all regulatory approach that will make it harder to serve current investors, particularly in smaller accounts.”
The two Chamber execs also say that DOL’s efforts to use administrative PTEs “to ‘shape’ the definition of a fiduciary will unnecessarily complicate, and increase costs attendant to, the provision of much-needed services to plans and their participants, as well as to IRA beneficiaries.”
Investors as well as regulated service providers — and DOL — would benefit if DOL were to first “issue an advanced notice of proposed rulemaking, including possible PTEs, before it proposes a rule,” the two write.