Republican senators are questioning the timing of a Department of Labor study on ways people go about planning their financial goals before and during retirement.
The DOL research request, published last week in the Federal Register, says that DOL is planning to undertake a “long-term research study to develop a panel that will track U.S. households over several years in order to collect data and answer important research questions on how retirement planning strategies and decisions evolve over time.”
The request states that “relatively little is known about how people make planning and financial decisions before and during retirement,” and that “a major hurdle to retirement research is the lack of data on how people make these decisions related to retirement.”
Sen. Johnny Isakson, R-Ga., chairman of the Senate Health, Education, Labor and Pensions Subcommittee on Employment and Workplace Safety, said in reaction to the data request that “it is appalling that, by its own admission, the Department of Labor does not know enough about how individuals and families make retirement decisions, yet the Obama administration is still willing to move forward with implementation of a fiduciary rulemaking.”
DOL’s rule to amend the definition of fiduciary under the Employee Retirement Income Security Act “would limit access to investment advice for the families who need it most and in my opinion is a solution in search of a problem,” Isakson said.
Isakson is a co-sponsor with Sen. Roy Blunt, R-Mo., of the Retail Investor Protection Act, companion legislation to Rep. Ann Wagner’s previous bill, which would stop DOL from moving forward on its fiduciary rule.
He also introduced in early February the Affordable Retirement Advice Protection Act that would require a vote by Congress before any final fiduciary rule by the administration goes into effect.
After reading DOL’s research request, Senate Labor Committee Chairman Lamar Alexander, R-Tenn., stated that DOL’s request “suggests it is blindly moving forward with policy that has the potential to cut off access to affordable retirement advice for millions of Americans and their families. The administration should withdraw this proposed rule — but, if not, Republicans will consider what options are necessary to help hardworking Americans planning for their future.”
However, Barbara Roper, director of consumer protection for the Consumer Federation of America, told ThinkAdvisor that the senators “are simply seizing on even the thinnest of pretexts to criticize” DOL’s forthcoming rule, which is expected out in final form by the end of March. The DOL’s data request “clearly seems to be focused on the broader questions of how people save for and behave in retirement.”
Added Roper: “The DOL did an extensive analysis of the harmful impact of conflicted advice” in crafting its fiduciary rule, “but that’s just one of a broader set of issues that affect retirement security.”
House Speaker Paul Ryan continues to take jabs at, and vows to fight, DOL’s rule, stating in a Monday blog posting his comments in a recent interview that DOL’s rule “is such overkill it is destined to put people out of business and making it harder for middle-class investors to get sound financial advice. . . I get more mail on this than anything. . . It will dramatically increase the cost for middle-class savers and place it out of their reach.”
— Check out 3 Steps to Prepare for DOL Fiduciary Rule on ThinkAdvisor.