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Regulation and Compliance > Federal Regulation > DOL

DOL's Su Tells House Lawmakers New Fiduciary Rule Remains a Priority

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Julie Su, the Labor Department’s acting secretary, told lawmakers that Labor’s new fiduciary rule will address consistent concerns with ”financial arrangements that can present conflicts of interest and the unlevel playing field that exists for different kinds of companies that give investment advice.”

The House Education and the Workforce Committee just posted responses that Su gave following June 7 testimony before a committee hearing titled “Examining the Policies and Priorities of the Department of Labor.”

“When retirement savers receive advice on how best to meet their particular financial needs, they should be able to trust that advice is in their best interest, and not motivated by the adviser’s own financial interests,” Su told the lawmakers.

Companies, Su said, “have different regulatory obligations, even though they are all providing retirement investment advice. This unlevel playing field creates problems for both workers and companies.”

Labor’s rulemaking, which could be released by the Office of Management and Budget this month, is focused on amending the regulatory definition of the term fiduciary “to 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,” Su explained.

The fiduciary regulatory package, titled “Retirement Security,” was sent to OMB on Sept. 8.

Labor, Su said, intends “that the amendment will 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 fiduciary rule, 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,” Su told the lawmakers.

Labor is coordinating with the Treasury Department and IRS and separately working with the Securities and Exchange Commission, Su relayed, “to ensure that any new fiduciary rule appropriately reflects the changes that the financial services industry has made to comply with the SEC’s Regulation Best Interest.”

The fiduciary rule, Su said, “continues to be a priority” for the DOL.


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