The Obama Administration continues to get pushback from its own party over the potential impact the proposed fiduciary rule might have on low income savers. In a “politics and strange bedfellows” moment, 401(k) and financial industry lobbyists have been joined by Rep. Gwen Moore (D-WI) and more than 20 of her colleagues in opposing the rule in its current form. The group of Democrats in the House circulated a letter last week to Labor Secretary Thomas Perez supporting “improvements to the Dept. of Labor retirement investment rulemaking.”
The members of Congress argue that the proposed rule’s “Best Interest Contract Exemption” would create “practical problems for providers to implement the exemption as proposed.”
NAIFA, an industry advocacy organization, praised the letter and its content, adding that it supports the representatives’ “call for DOL to work with stakeholders on solutions that will ensure the proposed rule does not overburden advisors and their clients by requiring signed contracts before advisors can have substantive conversation with clients.”
The letter also discussed the supposed benefit of lifetime income options provided by annuities “as part of a diversified retirement strategy.” The representatives asked the DOL to reconsider burdens that the proposal would place on advisors who work with clients to obtain annuities, saying that the rule should “not disadvantage lifetime income options.”
The Democrats’ letter along with previous letters and statements from Republicans and Democrats in Congress show that there is bipartisan support in Congress for DOL to fix the proposed rule, which critics claim is unworkable as currently written.