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September 09, 2023 at 11:05 AM
What You Need to Know
- DOL's plan would take into account practices of advisors, and the expectations of plan officials and participants, and IRA owners who receive investment advice.
- OMB reviews can take up to 90 days.
- DOL is plowing ahead with its latest damaging proposal despite the fact that federal courts have repeatedly rejected their efforts, said IRI's Chopus.
The Labor Department has filed its rule to amend the definition of fiduciary at the Office of Management and Budget for review.
The notice of proposed rulemaking at OMB states that the plan would “more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code.”
OMB reviews typically take 90 days.
The amendment, Labor said, “would take into account practices of investment advisers, and the expectations of plan officials and participants, and IRA owners who receive investment advice, as well as developments in the investment marketplace, including in the ways advisers are compensated that can subject advisers to harmful conflicts of interest.”
In conjunction with the rulemaking, Labor’s Employee Benefits Security Administration “also will evaluate available prohibited transaction class exemptions and propose amendments or new exemptions to ensure consistent protection of employee benefit plan and IRA investors.”
Top GOP lawmakers on the Senate Health, Education, Labor and Pensions (HELP) Committee and the House Education and the Workforce Committee told Acting Labor Secretary Julie Su in a recent letter to “cease further action” on a new fiduciary rule.
Sen. Bill Cassidy, R-La., ranking member of the HELP Committee, and Rep. Virginia Foxx, R-N.C., chairwoman of the Education and the Workforce Committee, said in the letter that they oppose Labor’s continuing efforts to promulgate a rule on “Conflict of Interest in Investment Advice” to revise the definition of fiduciary under Section 3(21) of the Employee Retirement Income Security Act.
