Well, that didn’t take long.
The White House Office of Management and Budget indicated on its website that as of Wednesday, April 10, it has concluded its review of the Department of Labor’s Retirement Security Rule.
OMB’s review, which officially began on March 8 and is allowed to take up to 90 days, was widely expected to be wrapped up quickly as the Biden Administration pushes for the rule to take effect before the November election.
“With the completion of OMB’s review, the next step would be for DOL to announce the final rule,” said the Insured Retirement Institute in a statement early Thursday.
“With the completion of OMB’s review, the next step would be for DOL to announce the final rule.”
IRI statement Thursday
While it is unclear at this point exactly when that will occur, when it does, the public will get its first look at any revisions made to the rule as a result of an enormous amount of feedback (more than 19,000 comments) the DOL received during an abbreviated public comment period that ended on Jan. 2.
On Monday, a letter sent to Labor Secretary Julie Su and OMB by 55 House Democrats led by Rep. Maxine Walters (D-CA), Ranking Member, Committee on Financial Services, called for an expedited review of the rule. The letter included “strong support” for it due to its goal of improving retirement investor protections when it comes the advice financial professionals provide related to employee-sponsored retirement plans.
“The 2023 DOL Rule is an important step in strengthening critically needed guardrails and protecting working families and retirees from conflicted financial advice,” the letter states in its conclusion. “We have long sounded the alarm on the need for strong regulations to protect our nation’s retirees from self-serving financial professionals, and there are major gaps in the regulatory framework that need immediate addressing. With this proposed rule, the DOL closes these loopholes once and for all and ensures that all retirement advice provided by financial professionals is made in the best interest of retirement savers.”
Gomez tells NAPA rule will level playing field
Lisa Gomez, the Department of Labor Assistant Secretary for EBSA, told attendees at the 2024 NAPA 401(k) Summit in Nashville on Sunday that the goal of the controversial rule is to level the playing field to protect retirement investors.
“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 during the session. “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.”
Gomez 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.
Challenges imminent
Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors (NAIFA), released a statement today expressing his disappointment that the OMB has concluded its review of the DOL’s “fiduciary-only rule that will limit the options of many American consumers seeking products and assistance as they prepare for retirement.
“White House officials’ lack of engagement during our meetings with them and rush to complete the OIRA review gives the impression that the administration is rubber-stamping this rehashed proposal and not considering the serious consequences it will have for the American public.”
NAIFA CEO Kevin Mayeux
“While we appreciate that NAIFA was able to present many of our concerns about the rule in a meeting with OMB’s Office of Information and Regulatory Affairs (OIRA) yesterday, it is unfortunate that OMB decided to advance this rule so quickly, even while OIRA still has meetings with additional stakeholders scheduled. White House officials’ lack of engagement during our meetings with them and rush to complete the OIRA review gives the impression that the administration is rubber-stamping this rehashed proposal and not considering the serious consequences it will have for the American public,” Mayeux said.
“The current rule is a revival of DOL’s failed fiduciary-only model that would limit consumers’ choices and curtail the access of many middle- and lower-income Americans to retirement products and services. This is the fourth time since 2010 the federal government has tried to expand fiduciary requirements for financial professionals. This DOL proposal is particularly unfortunate, coming at a time when many Americans are concerned about their economic security and ability to prepare for retirement. NAIFA is particularly disappointed that DOL is trying to saddle consumers with an additional layer of regulations when the stated goals of the proposed rule are already being achieved by the Securities and Exchange Commission’s Regulation Best Interest and state measures based on the National Association of Insurance Commissioners’ model best interest regulation for annuity transactions, both of which provide robust consumer protections and require financial professionals to work in clients’ best interests.
“NAIFA will continue working with our coalition partners and members of Congress as we pursue nonregulatory means of protecting American consumers from the consequences of the DOL rule.”
Another outspoken opponent of the DOL’s rule has been the Insured Retirement Institute, which released a statement from its President and CEO Wayne Chopus on March 8, the day the rule was sent to OMB for review. IRI has indicated it will release another statement upon the release of the Final Rule.
“IRI is dismayed that the Administration has decided to move forward with its fiduciary investment advice rule despite the evidence presented to DOL about the significant, unnecessary harm this rule will cause to retirement savers and concerns raised by members of Congress from both sides of the aisle,” Chopus said in the March 8 statement.
“As proposed, the rule fails to consider the diverse needs of retirement savers and the impact it will have on the ability of workers and retirees to realize the benefits of the SECURE Act and the SECURE 2.0 Act,” the statement continued. “If the final rule is substantially similar to the proposed version, millions of consumers would lose access to valuable lifetime income products and affordable professional guidance to help them knowledgeably acquire and use those products.”
SEE ALSO:
• Retirement Security Rule Update: 14 Stakeholders Set to Meet with OMB
• Gomez: DOL Fiduciary Rule Seeks to ‘Level the Playing Field’
• Congress Voicing Concerns with DOL Fiduciary Rule Proposal