In a letter to Acting Labor Secretary Julie Su, senior lawmakers on the Senate Health, Education, Labor and Pensions (HELP) Committee and the House Education and the Workforce Committee urged the agency to cease any further action to amend the definition of investment advice fiduciary.
In their joint letter to Su, Senator Bill Cassidy (R-LA), ranking member of the HELP Committee, and Representative Virginia Foxx (R-NC), chairwoman of the House Education and Workforce Committee, blasted the DOL’s for injecting market uncertainty and confusion with their fiduciary rulemaking process in recent years.
“Over the last two years, the Department has espoused at least three separate positions on what it means to be an investment advice fiduciary. By failing to articulate itself consistently, the Department has created unnecessary instability for retirement plans, retirees, and savers,” wrote the lawmakers. “As Biden’s DOL continues to change its stance in this area, we remind the Department of its attempt to promulgate a definition of fiduciary under ERISA section 3(21) in 2016 (the 2016 Fiduciary Rule). This ill-conceived and overreaching rule was decisively vacated by the U.S. Court of Appeals for the Fifth Circuit, and it should serve as a cautionary example.”
As The DI Wire reported in June 2023, the Department of Labor signaled earlier this year that issuing a new fiduciary rule was a “huge priority” for the agency, and DOL had indicated that a new rule would be unveiled for public comment in August. While the department has failed to meet that timeline, a new proposed rule is still expected in the near term.
According to the DOL, their rulemaking will focus on amending the definition of fiduciary “to more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code.”
The DOL is also expected to review available prohibited transaction class exemptions and propose amendments or new exemptions with the intention to ensure consistent protection of employee benefit plan and IRA investors.