NAIFA Meets White House Team Reviewing DOL Fiduciary Rule Effort

The National Association of Insurance and Financial Advisors is making a new push this week to stop the U.S. Department of Labor’s effort to apply a fiduciary standard to retirement investment advice providers.

The group said it sent a team to ask White House regulation reviewers to block the DOL proposal.

Kevin Mayeux, NAIFA’s CEO, and other NAIFA representatives met with officials at the Office of Information and Regulatory Affairs. Mayeux told regulation reviewers that implementing the DOL proposal would make retirement savings advice too expensive for middle-income families by forcing financial professionals to charge all clients fees, rather than relying on sales commissions from financial product providers.

“Simply put, American investors need more personalized assistance and more options for retirement planning and saving, not less,” Mayeux said, according to a summary of his remarks provided by NAIFA.

What it means: NAIFA and other financial services groups think they still have a chance to stop or change the DOL proposal.

OIRA: OIRA is a little-known but powerful body that analyzes the costs and benefits of proposed regulations and other federal rulemaking efforts. OIRA is part of the Office of Management and Budget, which, in turn, is part of the Executive of the President.

The OIRA review process can lead to changes in regulation provisions, changes in the implementation process for completed regulations and, occasionally, decisions by federal agencies to drop regulations.

The DOL fiduciary rule fight: The Employee Retirement Income Security Act of 1974 gives the Labor Department the authority to regulate benefit plan fiduciaries. A benefit plan fiduciary must put the benefit plan participants’ interests first.

The Labor Department and its Employee Benefits Security Administration division have worked for years on how to apply a fiduciary definition to retirement planners. The current proposal is a revamped version of an effort that died in the federal courts in 2018.

The new proposal would create an investment advice fiduciary definition and apply the definition to anyone who helps people move assets from arrangements that qualify for special federal income tax breaks, such as 401(k) plan accounts and individual retirement accounts, into other vehicles.

The proposed definition could have an especially big effect on insurance agents who sell non-variable annuities and non-variable cash-value life insurance because it would make them subject to federal oversight. Today, sellers of these types of products are regulated solely by state agencies.

The fiduciary proposal review process: The Labor Department unveiled the current proposal in October.

Many groups met with OIRA while the department was drafting the proposal. About 20 groups have scheduled OIRA meetings now that OIRA is reviewing the completed draft.

In addition to NAIFA, the list of groups with new OIRA meetings includes the American Council of Life Insurers, Finseca, the Financial Services Institute and many law firms and non-insurance groups.

The last meeting on the OIRA meeting list at press time was scheduled for April 15.

The White House. Credit: Matthew/ Adobe Stock