Echoing an idea he advanced last week at a retirement industry symposium, Rep. Peter Roskam, R-Illinois, suggested the Department of Labor’s proposed fiduciary rule is part of the Obama Administration’s larger effort to force control of the country’s retirement savings into the hands of government.
“The Administration’s own regulations, as well as public comments, have made it clear that they don’t want Americans to have control over how much to invest, which investments to choose, and when to draw down their accounts in retirement,” said Roskam in opening remarks at today’s House Ways and Means Oversight subcommittee hearing on the fiduciary rule.
“The road to hell is paved with good intentions,” added Roskam. “The reality is this regulation would prevent many people from getting any investment advice at all.”
Roskam tied the DOL’s rulemaking efforts to President Obama’s call for new rules to facilitate state-run retirement programs for workers in the private sector.
He cited the experience of public pension fund management in his own state—Truth in Accounting recently calculated Illinois’ unfunded pension liabilities at $111.5 billion—as a caveat against state management of private sector retirement funds.
“Given the extent of mismanagement and underfunding in existing public pension plans, which are underfunded by some $4 trillion, I can’t think of a better way to undermine the retirement security of Americans than to push them out of the private sector and into government-run public pension plans that are absolutely failing working families today,” said Roskam at today’s hearing.
The DOL decision to not re-propose a rule in spite of nearly 3,000 comment letters and “hundreds” of formal concerns issued by congressional members of “all ideological bents” suggests regulators are moving forward “with impunity,” added Roskam.
Roskam made that claim in spite of comments from Timothy Hauser, deputy assistant Secretary of Labor, made earlier in the week at the Investment Management Consultants Association in Washington.
“You’re likely to see that feedback’s going to be reflected in the final rule,” said Hauser, according to reporting in Investment News.
He specifically said the DOL is mulling changes to the proposed Best Interest Contract Exemption, the controversial provision that would require extensive fee disclosures on commission-based investment products.
Opponents of the rule say that it would force lower-income investors into fee-based accounts, which could cost more for investors than existing commission-based models.