The bottom line with Department of Labor’s controversial fiduciary rule, currently under review at the White House Office of Management and Budget, is that it seeks to level the playing field to protect retirement investors.
“At the end of the day, we just want there to be protection for plan participants.”
EBSA’s Lisa Gomez
That’s what Lisa Gomez, the Department of Labor Assistant Secretary for EBSA, told attendees during the opening general session at the 2024 NAPA 401(k) Summit in Nashville on Sunday.
“We’re trying to the extent possible to make this not so difficult and to draw upon what works for everyone so we can have just one level playing field,” Gomez said in a sit-down interview with American Retirement Association CEO Brian Graff. “How can we best do that so that we can end up at the other side in a better place where people know what’s expected of them and people know what to expect of investment advisors?”
Graff reaffirmed that ARA supports the goal of making sure everyone providing advice to retirement plan sponsors have that same responsibility as advisors providing information to individuals.
“We certainly agree with the importance of fiduciaries helping plan fiduciaries with those investment options,” Graff said. “A point that as an organization NAPA has made repeatedly is the fact that with respect to individual wealth management advice given at that level, you do have Reg. B.I., you do have the NAIC model rule, but none of those apply to the advice given to the plan sponsor.”
The latest iteration of the DOL rule, which it is calling the “Retirement Security Rule,” seeks to do just that.
“We are very focused on trying to come out with a rule that takes into account the differences as far as what the landscape looks like and protects retirement investors from harmful conflicts of interest that can come up when they are getting investment advice,” Gomez said.
She said during Sunday’s session that she is well aware that many people, including organizations and some lawmakers, are not happy with the rule and have called for it to be withdrawn. She knows legal challenges are coming. But before they do, she asked people to do one thing.
“Please read the rule before you make judgment on the rule,” Gomez said. “I’m sure they’ll be complaints filed in record time. There is sadly so much misinformation. Just get the facts. If you don’t like the facts, you’re perfectly entitled to not like the facts as we’ve written them, but at least know what you’re complaining about.”
“At the end of the day, we just want there to be protection for plan participants,” Gomez concluded.
Beyond the fiduciary rule, Graff and Gomez also talked about the DOL’s ESG rule, and how it is often misunderstood.
“This is a rule where the government is telling you we are going to get out of your way,” Gomez said.
She said the rule, at its core, tells plan fiduciaries that while they may consider environmental, social and governance factors in investing, above all, they can never put any of these considerations above the best interest of participants in the plan.
“There’s been a lot of misunderstanding that we’re requiring people to consider ESG, and that’s not true,” Gomez said. “This is a rule where we are taking our thumb off the scale. It’s the government telling you we are going to get out of your way.”
NAPA President warns about Washington
Sunday’s opening general session also featured remarks from incoming NAPA President Keith Gredys, the Kidder Company/Fuerza Financial Chairman and CEO.
He stressed the importance of NAPA members working together to fend off challenges facing the 401(k) market, including those seeking to eliminate their tax benefits.
“This year and in the years to come, our clients’ income and assets, as well as our industry—which works day and night to serve those clients—will be a target for Washington,” Gredys said.
“The folks in Washington are looking at qualified plan assets as a potential source of funds. Bottom line: the ability for plan advisors to assist our clients will be impacted if we sit and do nothing. Our livelihoods as trusted advisors will be impacted unless we do something,” he added. “Individually we can do only so much. Together, we are a powerful force.”
Gredys noted that NAPA has over 20,000 members representing nearly $3 trillion in assets. He encouraged attendees to answer two questions: “Why are we here and why do we do what we do? It can help us determine the future of our industry.”
More news from NAPA 401(k) Summit
A number of other announcements were made during Sunday’s opening general session. Among them:
• The 2025 NAPA 401(k) Summit will be held at the brand-new Fontainebleau in Las Vegas, April 28-30, 2025.
• NAPA is introducing the NAPA 401(k) Specialist designation for broker-dealers and RIAs, and a training program is coming June 2024. The education program is designed specifically for team members who are acting as relationship managers for plan sponsor clients, interfacing between plan sponsors and recordkeepers and other service providers. “We think it’s going to make a huge difference for all your team members working with plan sponsors,” Graff said.
• Summit attendees were encouraged to ramp up their involvement by attending the NAPA DC Fly-In Forum, July 30-31, 2024 in Washington D.C., to engage with key federal policymakers and advocate for legislative policy that affects the retirement industry.
SEE ALSO:
- Final Fiduciary Rule Coming Soon as OMB Completes Review
- NAPA 401(k) Summit Touches Down in Nashville
- Previewing the 2024 NAPA 401(k) Summit with Nevin Adams and John Sullivan
- Congress Voicing Concerns with DOL Fiduciary Rule Proposal
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
