For those curious to hear more about the direction of the Department of Labor under the second Trump administration, tune in tomorrow to hear Secretary of Labor Lori Chavez-DeRemer testify before the House Committee on Education and the Workforce in a hearing titled, “Examining the Policies and Priorities of the Department of Labor.”
The June 5 hearing will be held at 10:15 a.m. ET in the Rayburn House Office Building in Washington, D.C., and will be live-streamed on the Committee’s YouTube page.
Observers in the retirement plan industry probably don’t anticipate many surprises during Thursday’s hearing. Secretary Chavez-DeRemer’s appearance comes amid some significant recent policy shifts by the DOL that have attracted plenty of attention in the retirement and investment sectors.
One notable development is the DOL’s recent rescission of its 2022 guidance that had cautioned fiduciaries about including cryptocurrency options in 401(k) retirement plans. The original guidance advised plan fiduciaries to exercise “extreme care” when considering such investments—a stance that was criticized by some industry groups as overly restrictive while praised by others as providing necessary protection against a volatile sector.
The DOL’s recent withdrawal signals a shift under the Trump administration/Chavez-DeRemer’s leadership, potentially opening the door for more flexibility in retirement plan investment menus. Secretary Chavez-DeRemer criticized the previous guidance as governmental overreach, emphasizing that investment decisions should be made by fiduciaries rather than federal regulators.
Another topic that may surface during the hearing is the status of the Department’s environmental, social, and governance (ESG) rule. The Trump administration has directed the to reevaluate and rescind the Biden-era rule—which currently allows fiduciaries to consider ESG factors when making investment decisions—and replace it with a new regulation. A recent filing with the Fifth Circuit Court of Appeals confirms the administration has ceased its legal defense of the rule.
The DOL’s embattled fiduciary rule is also likely to come up during Thursday’s committee hearing. The rule, which aims to expand the definition of an investment advice fiduciary under ERISA, has faced legal challenges, strong industry opposition (amid some also-strong support from fiduciary advocates), and delays in implementation. Critics argue it could limit access to retirement advice for smaller investors, while proponents believe it is essential for protecting savers from conflicts of interest.
House Committee on Education and the Workforce members are expected to press Secretary Lori Chavez-DeRemer on whether the Department intends to defend the rule in court, pursue further revisions, or retreat altogether.
Back in March, Chairman of the House Committee on Education and Workforce Rep. Tim Walberg (R-MI) sent a letter to then newly confirmed Secretary Chavez-DeRemer urging her to to “rescind or withdraw” the fiduciary rule, put forth by previous DOL leadership under the Biden-Harris administration.
Again, Thursday’s 10:15 a.m. ET hearing will be live-streamed on the Committee’s YouTube page.
SEE ALSO:
• EBSA Rescinds Guidance Warning Against Cryptocurrency in 401(k)s
• Walberg Calls for DOL to ‘Rescind or Withdraw’ Fiduciary Rule
• Knut A. Rostad: Why EBSA Crypto Guidance Reversal is ‘Absolutely Awful Decision’
• DOL Fiduciary Rule, ESG Considerations Likely DOA Under Second Trump Term
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.