Daniel Aronowitz, President Donald Trump's nominee to be assistant secretary of Labor for the Employee Benefits Security Administration, which writes retirement policy, told lawmakers Thursday that the unit "needs a major turnaround."
During his confirmation hearing before the Senate Health, Education, Labor and Pensions Committee, Aronowitz said he'd "strive to provide regulatory clarity" to Labor's fiduciary rule "as applied to IRA rollovers," and "champion expanding retirement and health plan access to America’s independent contractor workforce, which includes association health plans."
Aronowitz told senators Thursday that he's an "experienced turnaround manager with unique fiduciary expertise and experience." In 2011, he founded Euclid Fiduciary, which he said has grown "to become a premier fiduciary liability underwriting company," now called Encore Fiduciary.
He outlined three goals if confirmed by the Senate:
- improve EBSA’s enforcement of fiduciary law, ending the practice of "open-ended investigations that go on for years."
- end "the bias against" employee stock ownership plans, or ESOPs, and find "other legitimate ways to expand" retirement benefits.
- end "the regulatory abuse of common-interest agreements" with plaintiff lawyers.
Fiduciary Rule Status
In mid-February, Judge Catharina Haynes gave Labor 60 days to decide whether it will appeal two district courts' universal stays of Labor's 2024 fiduciary rule.
Labor on Feb. 12 asked the U.S. Court of Appeals for the Fifth Circuit to pause the consolidated appeals, which were initiated under the administration of President Joe Biden.
Last July, the U.S. District Court for the Eastern District of Texas Tyler Division granted the request of the Federation of Americans for Consumer Choice and several independent insurance agents to delay the implementation of Labor's new fiduciary rule, officially called the Retirement Security Rule.
The filing in U.S. Court of Appeals for the Fifth Circuit states that, due to the recent change in administration on Jan. 20, "DOL is now under new leadership," and that new agency officials "are still in the process of on boarding and familiarizing themselves with all of the issues presented by pending litigation."
To allow new DOL officials "sufficient time to become familiar with the issues in these cases and determine how they wish to proceed, the government respectfully moves to place these consolidated appeals in abeyance, with status reports due at 60-day intervals," the filing states.
ERISA attorney Fred Reish of Faegre Drinker told ThinkAdvisor in a previous interview that DOL requested "a fairly routine 'hold' pending a review by the new DOL Secretary" and new head of EBSA, "once both are confirmed and in place."
Said Reish: "It means that the DOL could withdraw from the case, but it doesn’t necessarily mean that it will."
ERISA attorney Brad Campbell, partner at Faegre Drinker in Washington, told ThinkAdvisor Friday in an email that the Fifth Circuit "granted a second 60-day extension in mid-April at the government’s request — it runs to June 16."
June 16 "is the functional deadline for the next step in the Fifth Circuit litigation, but whether the next step is a substantive decision or a request for additional time is not yet clear," Campbell said. The court "is hearing the question of whether the stay on the rule’s effective date should remain, not ruling on the validity of the rule itself."
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