36 Republicans Urge Labor Department to Give Public More Time to Weigh in on Proposed Rule that Could Restrict Access to Retirement Advice

Chairman Alexander leads letter requesting a longer comment period on “complex” fiduciary rule proposal

Posted on May 13, 2015

WASHINGTON, D.C., May 13 – U.S. Senator Lamar Alexander (R-Tenn.), chairman of the Senate labor committee, led a group of 36 Republicans today in a letter to Secretary of Labor Thomas Perez requesting an extension of the comment period from 75 days to 120 days on the Department of Labor’s (DOL) proposed rule to redefine and expand the term “fiduciary,” which was posted on April 20. 

In the letter, the senators request sufficient time for “thorough consideration of all issues and interests to make sure working and middle-income Americans are not harmed” by changes to the proposed rule. “The newly proposed rule and exemptions would significantly alter the retirement landscape for countless Americans with retirement plans and/or individual retirement accounts insofar as the rule and exemptions expand fiduciary duties owed by investment advisers,” the senators write.  

“Given that the complex rule and its exemptions together run 120 pages with another 250 pages of economic analysis, we encourage the Department to allow consumers and stakeholders a reasonable opportunity to review the proposed rule and exemptions by extending the comment period to 120 days.”

The proposed rule would change how advice provided to individuals with retirement plans and individual retirement accounts is regulated by expanding fiduciary duties and liability owed by investment advisers, and will have “a significant effect on countless working and middle-income Americans who have worked and saved so diligently to ensure a secure retirement,” the senators say.

A similar rule was proposed by DOL in 2010, but it was withdrawn after it was met with bipartisan opposition as it would have limited access to investment advice for working and middle-income Americans. 

Alexander sent a letter in March warning of the potential negative impact of approving the proposed rule if the current proposal has not changed significantly from the proposal DOL offered in 2010. A group of nine Senate Democrats also sent a letter last week asking for the comment period to be extended.

The full text of the letter is below.

May 13, 2015

 

 

The Honorable Thomas E. Perez

Secretary

United States Department of Labor

200 Constitution Avenue, NW

Washington, DC 20210

 

Dear Secretary Perez:

We write today to request that the comment period be extended for the Department of Labor’s (DOL) recently proposed rule, the “Definition of the Term ‘Fiduciary’; Conflict of Interest Rule—Retirement Investment Advice,” amendments to exemptions, and exemptions (collectively, “exemptions”).[1]  Given that the complex rule and its exemptions together run 120 pages with another 250 pages of economic analysis, we encourage the Department to allow consumers and stakeholders a reasonable opportunity to review the proposed rule and exemptions by extending the comment period to 120 days.  

The Department’s current proposal provides for a 75-day comment period that ends on July 6, 2015.[2]  This is not an appropriate amount of time. The proposed rule and exemptions will have a significant effect on countless working and middle-income Americans who have worked and saved so diligently to ensure a secure retirement. The Department has stated that it will not extend the comment period,[3] but bipartisan support to extend the deadline is growing.[4] 

Previously in 2010, the Department provided consumers and stakeholders with additional time to develop informed opinions of and submit comments relating to proposed DOL changes to fiduciary standards.  The 2010 “fiduciary” rule was significantly shorter in length, but the Department initially provided for a 90-day comment period.[5]  Yet, the Department is providing only 75 days to review this longer and more complex proposed rule.  In 2010, the Department stated that it wanted “[t]o ensure that all interested persons ha[d] the opportunity to prepare and submit comments on the proposed rule,” and expanded the proposed rule’s comment period by two weeks to give consumers and stakeholders a total of 104 days for review.[6]  Employee Benefits and Security Administration (EBSA) Assistant Secretary Phyllis C. Borzi further commented that “We recognize the significance of the proposed rule for plans, participants, beneficiaries and many plan service providers and therefore believe the steps we are announcing today [including the comment period extension] will ensure broad consideration of all the issues and interests in this regulation.”[7] 

The Department’s current proposed rule and exemptions implicate the same need for thorough consideration of all issues and interests to make sure working and middle-income Americans are not harmed. The newly proposed rule and exemptions would significantly alter the retirement landscape for countless Americans with retirement plans and/or individual retirement accounts insofar as the rule and exemptions expand fiduciary duties owed by investment advisers.     

Therefore, we ask that the Department extend the comment period to 120 days in order to afford consumers and stakeholders the best chance to thoroughly review the rule and provide informed opinions and comments. 

We appreciate your prompt time and attention to our request, and we look forward to staying apprised of further developments. 

 

Sincerely,

 

 

[1] Definition of the Term “Fiduciary”; Conflict of Interest Rule—Retirement Investment Advice, 80 Fed. Reg. 21928-21960 (proposed Apr. 20, 2015) (to be codified at 29 C.F.R. Parts 2509 and 2510) [hereinafter 2015 Conflict of Interest Rule].  Exemptions and amendments to exemptions are codified at Volume 80 of the Federal Register. 

[2] See 2015 Conflict of Interest Rule.

[3] See Melanie Waddell, DOL Not Budging on Fiduciary Rule Comment Period, ThinkAdvisor (Apr. 23, 2015), http://www.thinkadvisor.com/2015/04/23/dol-not-budging-on-fiduciary-rule-comment-period.

[4] See Mark Schoeff, Jr., Democratic senators split from White House on DOL fiduciary rule, InvestmentNews (Apr. 30, 2015), http://www.investmentnews.com/article/20150430/BLOG07/150439998/democratic-senators-split-from-white-house-on-dol-fiduciary-rule.

[5]  See Definition of the Term “Fiduciary,” 75 Fed. Reg. 65263-65278 (proposed Oct. 22, 2010).

[6] Press Release, U.S. Dep’t of Labor, US Department of Labor Announces a Public Hearing on Proposed Definition of Fiduciary Regulation (Dec. 22, 2010) (emphasis added).

[7] Id.