Labor Secretary Mum On Specifics Of DOL Rule Review

Labor Secretary Alexander Acosta told a congressional committee that the final notice to delay the fiduciary rule’s implementation to July 1, 2019, will be published “soon,” while the department continues its analysis.

Acosta, speaking before the House Committee on Education and Workforce, did little to quell concerns that the DOL may not push forward with the full rule and, in fact, referenced President Trump’s executive order requiring the DOL to undertake an economic and legal review of the fiduciary rule.

At the same time, Preston Rutledge, who was nominated to be assistant labor secretary for the Employee Benefits Security Administration (EBSA), told lawmakers at his confirmation hearing before the Senate Health, Education, Labor and Pensions Committee that he is not opposed to the rule, but wants to make sure it does not hurt retirement plan participants. If confirmed as EBSA assistant secretary, Rutledge will directly oversee the implementation of the fiduciary rule.

Several lawmakers asked Acosta about the status of the fiduciary rule. The Labor Secretary said the standard went into effect in June, but that full implementation, including the remedy options available, are included in the notice that is pending at the Office of Management and Budget. He has said previously he expects the extension to get OMB approval by the third or fourth week of November.

Acosta did not shed much light on what the new rule would or wouldn’t include, but said “the title of that notice would make clear that there is an 18-month extension if that notice goes forward,” Acosta said.

Acosta told lawmakers that the Securities and Exchange Commission should be a partner in the rulemaking process and collaborate with the DOL on the fiduciary rule. The Labor Secretary noted that the SEC declined to be a partner with the DOL in developing a fiduciary rule during the past administration, but said he believes the agency has an important role to play.

He also pointed lawmakers to his May editorial, “Deregulators Must Follow the Law, So Regulators Will Too,” in The Wall Street Journal, in which he underscored President Trump’s executive order requiring that the DOL undertake an economic and legal review of the fiduciary rule.

Acosta wrote that “President Trump has committed—and rightly so—to roll back unnecessary regulations that eliminate jobs, inhibit job creation, or impose costs that exceed their benefits. American workers and families deserve good, safe jobs, and unnecessary impediments to job creation are a disservice to all working Americans. As the Labor Department approaches this regulatory rollback, we will keep in mind two core principles: respect for the individual and respect for the rule of law.”

The DOL’s enforcement of the fiduciary rule continues to be in “compliance assistance mode,” Acosta said.

“What would happen if a retiree is not provided advice that is in their best interest” during the rules transition period? asked Rep. Bobby Scott (D-Va.).