With the Department of Labor’s January 2 deadline to submit comments on its fiduciary proposal fast approaching, thousands of industry professionals are submitting their support or opposition for the rule.
As of December 27, over 16,000 comments have been made regarding the DOL’s October 31 proposed “Retirement Security Rule: Definition of an Investment Advice Fiduciary,” and related prohibited transaction exemption amendments. If enacted, the rule would require trusted investment advisors to adhere to high standards of care and loyalty when they make investment recommendations and avoid guidances that favor their financial and other interests at the expense of retirement savers.
The proposal has caused severe debate across retirement planning and insurance industries, many of the latter who argue that insurance professionals should not be subject to federal legislation it previously had no affiliation with, and especially without a governing institute, like the retirement planning industry has with the Employee Retirement Security Act of 1974 (ERISA), overseeing its practices.
The National Association for Fixed Annuities (NAFA), a major opponent of the rule, released a statement urging members to submit an already-constructed comment that demands the proposal’s withdrawal.
“It is imperative that agents and advisors who stand to be impacted by this proposal voice their opposition en masse to help clearly communicate the depth and breadth of harm it would cause,” NAFA’s statement reads. “Accordingly, we are asking you, other producers from your practice and any downlines to use the link below to submit letters of opposition directly to the Department.”
“The Proposal is based on dangerously flawed assumptions and should be withdrawn in its entirety.”
National Association for Fixed Annuities
The link connects members to a prepared comment by NAFA, which states, along with other points, that “The Department’s Proposal jeopardizes the retirement security of hardworking Americans by denying access to the guarantees against investment market volatility and longevity risk that only fixed and fixed index annuity products can provide. The Proposal is based on dangerously flawed assumptions and should be withdrawn in its entirety,” the comment reads.
While the DOL generally allows 60 days for industries and professionals to comment on proposed rulemaking, a coalition of 18 financial industry trade groups requested the federal regulator to extend its comment period, adding that it was too brief for such a complicated ruling and would fall on the traditionally quiet holiday season.
The DOL later denied an extension, noting that it “… believes that its current proposal reflects significant input it has received from public engagement with this project since 2010.”
The influx of comments come as the Department of Labor released transcripts of its two-day public hearing from December 12 to 13. Video recordings of the hearing were also made available on December 19.
“The Employee Benefits Security Administration thanks the more than 40 witnesses who appeared at the online public hearing, as well as those who have submitted or are planning to submit a public comment,” said Assistant Secretary for Employee Benefits Security Lisa M. Gomez, in a statement. “We will carefully consider the public’s input as we continue work on this important rulemaking.”
SEE ALSO:
- ‘A’ List Industry Lineup Set to Testify in Dec. 12-13 Fiduciary Rule Hearing
- Insurance Industry Questions Next Steps for DOL Fiduciary Rule
- IRI’s Jason Berkowitz: Why Biden’s Fiduciary Rule Gets it Wrong
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
