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Retirement Planning > Saving for Retirement

Senate Panel Advances Labor’s EBSA Chief Nomination

By Melanie Waddell

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The Senate Committee on Health, Education, Labor and Pensions (HELP) advanced two important Labor Department nominations Wednesday — Preston Rutledge to be assistant secretary of Labor for the Employee Benefits Security Administration, and Kate O’Scannlain to serve as Labor’s solicitor.

If confirmed, Rutledge will be instrumental in shepherding through any change that Labor makes to its fiduciary rule. 

“It is difficult for the work on the fiduciary rule to move forward without political leadership” at EBSA and without a full Securities and Exchange Commission, said Fred Reish, partner at Drinker Biddle & Reath in Los Angeles. Rutledge’s “confirmation will cure the first part of that.”
 
Rutledge’s “years of experience with retirement issues and the political environment will make him an effective leader for moving the fiduciary rule through the DOL and coordinating with the SEC,” Reish added. 

Rutledge currently serves as senior tax and benefits counsel for Senate Finance Committee Chairman Orrin Hatch, R-Utah, and was nominated to be EBSA head by President Donald Trump on Oct. 13.

Both Rutledge and O’Scannlain’s nominations passed the HELP Committee by voice vote. Their nominations now advance to the full Senate.

“We are excited about the prospect and are looking forward to working with Preston to develop and put in place policies which will help to expand access to workplace retirement plans, increase retirement savings, and boost the utilization of lifetime income products,” said IRI Senior Vice President and General Counsel Lee Covington.

IRI said that it “strongly urged” the Senate to act quickly to confirm him.

Labor delayed by 18 months on Nov. 27 the Jan. 1, 2018, effective date of the rule’s enforcement provisions — the Best Interest Contract Exemption and the Principal Transactions Exemption, and the applicability of certain amendments to Prohibited Transaction Exemption 84-24. The compliance date was moved to July 1, 2019.

Labor said the extension gives the department time to consider public comments and to comply with the request Trump made on Feb. 3 for Labor to review the rule and decide whether possible changes and alternatives to exemptions would be appropriate.

On the Senate Finance Committee, Rutledge’s’ duties include employee benefits, retirement issues, tax-exempt organizations, health tax issues, and the tax provisions of the Affordable Care Act.

Prior to joining the Finance Committee, Rutledge served as a senior tax law specialist on the headquarters staff of the Tax Exempt and Government Entities Division of the Internal Revenue Service, and as a senior technical reviewer in the Qualified Pension Plans branch of the IRS Office of Chief Counsel.

Rutledge has been in private law practice as an employee benefits counselor and ERISA litigator.

— Check out Ron Rhoades Sees Grim Fiduciary Rule Future on ThinkAdvisor.

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