Republican lawmakers from the House Committee on Education and the Workforce told Labor Secretary Thomas Perez to “immediately withdraw” DOL’s fiduciary redraft as the plan will “reduce investment options and increase costs for retirement savers.”
The lawmakers on the committee, which has jurisdiction over DOL, also told Perez in their comment letter that they worry DOL’s plan will conflict with the Securities and Exchange Commission’s fiduciary rulemaking under the Dodd-Frank Act.
“DOL’s steamrolling continues unabated and unconcerned with the very real objections lodged by stakeholders and investors,” the lawmakers said.
This latest iteration of the DOL’s fiduciary rule “suffers from many of the same fatal flaws” as the 2010 plan that “was roundly criticized by stakeholders and lawmakers on a bipartisan basis.”
DOL received 775 comment letters during its public comment period, which expired July 21. The department plans to hold a series of public hearings on its proposed rule the week of Aug. 10.
Kent Mason, a partner with Davis & Harman, a Washington-based law firm that represents big financial companies, said that based on the Department’s past comments, he anticipates that “after the close of the post-hearing comment period (likely in mid-September), the Department will be working on finalizing the regulation,” with DOL aiming to publish the final regulation around March 2016.
The lawmakers told Perez that they “fear” DOL’s approach in its rulemaking “is motivated by an insatiable desire to re-engineer the retirement services industry and control the mode and manner that Americans save for retirement.”
Some of the “most basic advice,” such as assistance in rolling over funds from a 401(k) to an IRA or “determining how funds should be distributed upon retirement, would be prohibited,” the lawmakers argue.
Perez told members of the Senate HELP Committee’s Employment and Workplace Safety subcommittee on Tuesday that while DOL has yet to make any “final decisions” on how to amend its fiduciary redraft, any final rule will incorporate changes that have been suggested.
“We are very flexible in how to get this [rulemaking] done,” Perez told members of the subcommittee. “We haven’t made any decisions yet on what to do [regarding amending the redraft] because the comment period is still open. But we’ve gotten some great advice.”
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