Release of Final DOL Fiduciary Rule Expected Soon

In a letter sent Monday — and released Wednesday — Waters along with 55 House democrats told Labor, the Office of Management and Budget, and the Administrator of the Office Information and Regulatory Affairs to “expedite the review process” of Labor’s Retirement Security Rule.

The rule, the lawmakers wrote, “will strengthen critically needed guardrails and protect working families and retirees from conflicted financial advice by self-serving financial professionals regarding employee-sponsored retirement plans.”

The lawmakers explained that they “applaud the DOL for taking this much needed step and urge the OMB and OIRA to expeditiously complete its review of the Rule so that it would become final as close to its proposed form as possible.”

Industry officials and attorneys have said that they anticipate that Labor’s final rule will not include many changes and that there will be a quick review by OMB.

Labor filed its final rule at OMB on March 9.

Letter Details

At a high level, the lawmakers wrote that the 2023 DOL rule “would revise the definition of an investment advice fiduciary under ERISA to encompass certain types of advice that are currently not covered by the law—a revision which we applaud.” This includes, among other items:

One-time advice about whether to roll over a 401(k) into a new retirement account like an IRA or an annuity;
Advice about purchasing non-securities like fixed-indexed annuities; and
Advice given to plan sponsors and employers (rather than just plan participants) about the types of products to include in their plan line-ups.

The lawmakers pressed for OMB and OIRA “to quickly complete its review of the rule so that it would become final,” adding that they’ve “long sounded the alarm on the need for strong regulations to protect our nation’s retirees from self-serving financial professionals, and there are major gaps in the regulatory framework that need immediate addressing.”

With Labor’s plan, “the DOL closes these loopholes once and for all and ensures that all retirement advice provided by financial professionals is made in the best interest of retirement savers,” the lawmakers said.

Wagner Weighs In

Rep. Ann Wagner, R-Mo., chairwoman of the House Financial Services Capital Markets Subcommittee — a staunch critic of Labor’s fiduciary rule efforts — said in a Facebook post that “this is a flagrantly partisan, rushed review that will only serve to advance the Biden Administration’s radical political agenda.”

Wagner told acting Labor Secretary Julie Su in early January that Labor should “cease its efforts to adopt this proposal in order to prevent needlessly inflicting harm on millions of retirement savers across the country.”