Republican members of the House Committee on Education and the Workforce, chaired by Rep. Virginia Foxx (R-NC), are urging the Department of Labor (DOL) to further delay implementation of the fiduciary rule
, which would force low- and middle-income families to pay more for retirement advice and make it harder for small businesses to offer their workers retirement options.
submitted to Acting Labor Secretary Edward Hugler, members wrote, “Thankfully, President Trump has provided an opportunity to reevaluate the rule. We share the concerns that led to the Presidential Memo, including the potential disastrous effects the regulation is likely to have on retirement savings.” They added that the rule would mean “fewer working families would have access to affordable advice.”
The members expressed concerns over the accuracy of the Obama administration’s analysis of its rule and emphasized the importance of the new economic analysis directed by President Trump:
While it is apparent that the regulation will reduce access to affordable investment advice, proponents falsely claim significant financial benefits for retirement savers … Nearly from the start, the Obama administration’s analysis came under intense scrutiny … Therefore, the President’s directive to conduct a new economic analysis is absolutely vital to ensure retirement savers are not adversely affected.
The rule is currently set to take effect June 9, 2017. But members said it would be “counterproductive” for the rule to be implemented before conclusion of DOL’s analysis. In closing, members urged the administration to take further action to protect access to affordable retirement advice:
[The] Committee is eager to work with the administration to mitigate the harm caused by this onerous regulation. Indeed, retirement policies should ensure access to affordable, sound retirement advice for working families and retirement savers. The Department should not establish an arbitrary applicability date for a regulation that should be rescinded or significantly revised. Instead, we urge you to clarify that the applicability date of the regulation will be delayed until the analysis required by the President’s Memo is completed and rescission or appropriate revisions are finalized.
The full letter is available here.
BACKGROUND: The Obama administration’s fiduciary rule imposes a host of new mandates and regulatory requirements on retirement advisors. Since the rule was first proposed, bipartisan concerns have been raised about the negative effects the new mandates will have on individuals and small business owners, including:
- Making it harder for low- and middle-income families to save for retirement.
- Restricting the ability of individuals to receive some of the most basic financial advice.
- Creating new hurdles for small businesses that will have to pay more to offer their workers retirement options.
Led by Rep. Phil Roe (R-TN), lawmakers advanced complementary bipartisan proposals in 2016 that would require financial advisors to act in the best interests of their clients, and ensure low- and middle-income Americans have access to quality, affordable retirement advice. The House and Senate also passed a joint resolution of disapproval under the Congressional Review Act to block the rule, but the resolution was vetoed by President Obama.
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