Senate Finance Committee Chairman Orrin Hatch, R-Utah, said late Tuesday that he will reintroduce his Secure Annuities for Employee (SAFE) Retirement Act this year.
The act, a package of public and private retirement plan reforms, includes language that stops the Department of Labor from writing fiduciary rules for individual retirement accounts, just as Jason Furman, chairman of President Barack Obama’s Council of Economic Advisers, has maintained that it’s “high time” for DOL to update the 40-year-old Employee Retirement Income Security Act.
Both Hatch and Furman spoke on Capitol Hill at an event on retirement security held by the Bipartisan Policy Center.
A spokesperson for Hatch’s office said that while the “base” SAFE Retirement Act “will be the same,” the bill may be reintroduced with modifications, as Hatch’s office has “been talking to stakeholders and seeking input for improvement of the bill for two years.”
As to the DOL fiduciary redraft, Hatch “believes Treasury, not DOL, should draft the fiduciary duty rule for IRAs,” the spokesperson said.
Hatch, who spoke with reporters after his brief remarks at the event, said his committee will look at the DOL’s fiduciary redraft, but that “right now we’re concerned about TPA,” the Trade Promotion Authority legislation, which is now “up in the air” as the bill was filibustered on Tuesday. “We have to see if we can get that [TPA bill] back on track.”
Furman stated that DOL’s fiduciary redraft, the Conflict of Interest Rule for Retirement Savings, is one of four areas the administration is focusing on regarding retirement savings policy.
Besides updating the 40-year-old ERISA rules, Furman said the administration is focused on expanding access to retirement savings plans via such measures as the AutoIRA, as well as Obama’s MyRAs; Furman added the administration is “getting that [MyRA] process started.”
DOL’s fiduciary redraft is out for a 75-day comment period.
An audience member at the BPC event representing the American Council of Life Insurers stated that the DOL redraft, in its current form, is not workable, noting that the ACLI worries the redraft will “shut out” the ability to provide information on annuities and lifetime-income products to individuals.
Furman responded that unlike the 2010 fiduciary redraft, the new proposal “carves out and allows you [the advisor] to provide education. We have a broad exemption” around providing education.
Citing research done by the administration that shows conflicts of interest cost investors $17 billion in losses per year, Furman stated that it’s important to “not hide behind every argument we can drum up to not act” in updating ERISA; the act “hasn’t been changed in 40 years, and it’s high time to do so.”
— Check out Lawmakers Ask DOL’s Perez to Extend Fiduciary Comment Period on ThinkAdvisor.