DOL’s Gomez Explains New Fiduciary Rule
While it's now called the Retirement Security rule, its intent hasn't changed, the Labor official tells ThinkAdvisor.
Lisa Gomez, assistant secretary of Labor for the Employee Benefits Security Administration, said Tuesday that Labor changed the name of its upcoming new fiduciary rule to the Retirement Security rule to reflect a move forward from the 2016 Conflict of Interest rule.
“It’s the retirement security rule with respect to the definition of an investment advice fiduciary,” Gomez told ThinkAdvisor on the sidelines of the American Society of Pension Professionals & Actuaries’ annual conference in National Harbor, Maryland, just outside Washington.
Labor’s new rule, due to be released any day now from the Office of Management and Budget, “will still cover who is a fiduciary for purposes of providing investment advice for a fee; it’s not that we are going in a different direction,” Gomez told ThinkAdvisor. “That is still what the rule covers, but the purpose of changing the name of the rule was because there have been so many changes since the last rule came out, it’s sort of a signaling and moving people forward rather than backward.”
While the new rule is “under the same umbrella, same themes to be discussed” as under the previous conflict of interest reg, Gomez continued, the renaming to Retirement Security is an attempt “to recast it and have people be looking forward at the rule … We’ve heard a lot of feedback from people that it’s just the 2016 rule all over again.”
The 2016 rule, officially called the Conflict of Intrest Rule – Retirement Investment Advice, was thrown out in court in 2018 after fierce opposition from the financial services industry.
“There are so many things that have changed since the 2016 rule came out with respect to other agencies giving guidance, certainly litigation,” Gomez said, “so hopefully once people see the proposal it will be a lessons learned, what’s changed since the last rule; changing the name is one way to try to do that.”
During her prepared remarks at the ASPPA event, Gomez reiterated the fact that the fiduciary rule remains a “very high priority” for Labor and the Biden-Harris administration.
Once the rule is reviewed and approved by OMB, Gomez said, Labor is “looking forward to publishing that and hearing back from folks.”
Labor filed its new fiduciary rule at OMB in early September. As of Friday morning, the rule was still pending review.
OMB reviews typically take 90 days but the rule is expected to be released this month.
“It makes sense for the proposal to be released by the OMB and published in the Federal Register before the next possible government shutdown in mid-November,” Fred Reish, partner at Faegre Drinker, told ThinkAdvisor in a previous interview.