Labor Secretary Thomas Perez signaled Friday that DOL is braced for legal challenges to its rule to amend the definition of fiduciary on retirement advice.
Perez, speaking at a Brookings Institution event in Washington about how retirement investment advice should be regulated, acknowledged that once the Department’s fiduciary rulemaking process under the Employee Retirement Income Security Act “reaches its conclusion,” other issues will “emerge,” and that DOL will move forward “thoughtfully and carefully” to address those concerns.
“This is not the first complex rulemaking that I’ve been involved with,” Perez told attendees at the Brookings event. “Our goal is to help everyone comply,” he said. DOL will “not engage in the gotcha game.”
Perez cited the recent challenge DOL faced against its final Home Health Care ruling to extend minimum wage and overtime protections to almost two million home care workers. Last June, associations of home care companies filed a lawsuit in federal court challenging DOL’s final rule. However, the U.S. Court of Appeals on Oct. 13 unanimously upheld DOL’s rulemaking.
Perez noted that throughout the time the home health care rule was being challenged, DOL “worked with stakeholders” on complying with the rule.
In his comments to attendees, Perez stated that DOL’s rule to amend the definition of fiduciary under the Employee Retirement Income Security Act, “has been one of the longest rulemakings that I’ve been involved with.”
He noted the whopping 391,621 comments and petitions that came in during the conflict of interest rule’s comment period.
During a brief question-and-answer session after his remarks, Perez noted that while he couldn’t comment on “what the outcome” of a final fiduciary rule will look like, “I’m confident we will be making changes to improve the rule.”
Lisa Bleier, managing director and associate general counsel for the Securities Industry and Financial Markets Association, said Friday that while Perez stated again Friday there will be “major changes to the proposed rule, it remains unclear whether or not our recommendations will be incorporated.”
More than 100 House Republicans told Perez in an Oct. 6 letter to tell them by Oct. 21 how DOL will make “substantial changes” to “shortcomings” in its fiduciary plan, but to also allow stakeholders to view those changes before issuing a final rule.
Bleier added that given the volume of comment letters “from both opponents and proponents suggesting substantive changes, the complexity of the rule, and the unintended consequences on retirement savers, we believe that it is imperative to take another look before the rule becomes final and urge the DOL to repropose.”
Industry officials expect a final DOL fiduciary rule to be out in the first half of 2016.
— Check out Spending Bill Rider May Be Best Way to Stop DOL Rule: Rep. Wagner Aide on ThinkAdvisor.