Industry officials anticipate a quick confirmation of R. Alexander Acosta to be the next secretary of Labor after his March 15 confirmation hearing before the Senate Health, Education, Labor and Pensions Committee.
Following next week’s hearing, announced by the HELP committee early Wednesday morning, an executive session will be scheduled for committee members to vote on Acosta’s nomination.
While industry officials see Acosta being confirmed likely within a month, and a delay of Labor’s fiduciary rule from its April 10 compliance date to June 9, they’re skeptical that quick action will be taken by Labor on modifying the rule or doing away with it.
“It appears that there will be a delay to the [fiduciary rule’s] applicability date until June. I don’t see the Acosta hearing derailing this,” said Steve Saxon, chairman of Groom Law Group, which specializes in employee benefits.
Delaying the fiduciary rule’s compliance date is necessary, Saxon said, so that Labor can respond to President Donald Trump’s Feb. 3 order to review the rule, and if it deems appropriate, issue a proposal to revise it.
“What will be most interesting, and somewhat complicated, is what happens when [Acosta] gets there” to Labor, Saxon added. “We have a final [fiduciary] rule; it’s effective, presumably, and it will have a set applicability date. There’s a lot of momentum behind just moving forward with the rule; on the other hand, there’s a lot of momentum on repealing the rule. Someone could drop a bill” on Capitol Hill to further derail the rule or litigators could persuade a court to issue a stay of the rule.
Fred Reish, a partner in Drinker Biddle & Reath’s employee benefits and executive compensation practice group in Los Angeles, notes that while the delay can be done by acting Labor leadership, “it will take political leadership to evaluate whether to modify the rule or to kill it. At the least, that means that the secretary needs to be in place.”