Scalia Grilled on DOL Fiduciary Rule at Hearing
A senator questioned the Labor secretary nominee about his thoughts on retirement advice and how he sees his role in crafting a rule.
Eugene Scalia, President Donald Trump’s nominee to head the Labor Department, said Thursday that he would, if confirmed, “seek guidance from the designated ethics official” at Labor as to his ability to participate in crafting a fiduciary rule.
Sen. Patty Murray, D-Wash., ranking member of the Senate Health Education Labor and Pensions (HELP) Committee, stated to Scalia during the Thursday nomination hearing that he’s “had a lot of work in overturning the [now vacated Obama administration fiduciary] rule.” She then asked Scalia: “Would you recuse yourself from participating in DOL’s forthcoming revised fiduciary rule because of that/?”
Scalia responded: “As you know, there are federal ethics rules that will govern what matters that I can work on, when I’m at the department, where there might have been some prior connection on my part or the part of my firm or a client. So in the case of the fiduciary rule, I would seek guidance from the designated agency ethics official at the Department of Labor regarding what my ability to participate would be.”
Murray also probed Scalia on whether he believed retirees were entitled to unconflicted advice, stating that the Obama administration “worked to help retirement savers to get retirement advice that was free of conflicts of interest…You’ve been an outspoken critic” of the fiduciary rule, and “you fought to get it overturned,” Murray said.
“Do you think families seeking professional investment advice about their retirement savings deserve advice that is in their best interest?” Murray asked Scalia.
Scalia responded: “I do think they should be able to seek that advice.”
Murray interrupted: “And know when they get it it’s in their interest and not the person advising them?”
Said Scalia: “I think that that should be available and they should be informed of the nature of the advice they’re receiving and if there are conflicts. This is a case where, as the chairman and I were discussing earlier, I was retained by clients to address a rule; it was a controversial rule. Thankfully, the Securities and Exchange Commission has stepped in and itself adopted what’s called a best-interest standard with respect to broker-dealers who are folks that ordinarily are regulated directly by the SEC, rather than by the Department of Labor. Again, having worked at the department before, I’m very mindful of this special role that the department has in protecting pensions and workers’ retirements.”
— Check out New DOL Fiduciary Rules Out in Next 2 Months: Attorneys on ThinkAdvisor.