“While we are all doing our best to navigate the many challenges that stem from the Covid-19 pandemic and the accompanying economic turmoil that our nation is facing, many of our organizations have extremely limited staff and resources and are not able to operate at full capacity. These obstacles hinder our and others’ ability to comment meaningfully on the proposal,” the groups maintained.
“Thirty days is a ridiculously short comment period for a rule that affects millions of retirement savers,” CFA Director of Investor Protection Barbara Roper said on Twitter. “It’s almost as if the DOL doesn’t want to hear from anyone except their industry supporters.”
The proposal also creates an exemption for ERISA fiduciaries allowing them to conduct what were, for a time, defined as “prohibited transactions” involving third-party compensation as long as certain “impartial conduct standards” are met.
Additionally, critics argue that by reaffirming the five-part fiduciary test that the Obama administration attempted to replace, the test can allow advisors who make rollover recommendations to escape a fiduciary standard.
The pro-consumer groups argue that the Administrative Procedure Act requires that the Department of Labor “provide the public with adequate notice of a proposed rule followed by a meaningful opportunity to comment on the proposed rule’s content,” which should include time to do surveys and research.
“Even organizations that manage to submit comments under these unduly rushed circumstances will be denied the opportunity to do so fully, including the opportunity to conduct research and submit written data to properly inform this rulemaking,” the groups argued.