The Department of Labor’s new fiduciary rule—now known officially as “Conflict of Interest in Investment Advice”—will finally be unveiled to the public during a White House event at 3:30 p.m. on Tuesday schedule to be attended by President Joe Biden, according to a report released Sunday by the National Association of Plan Advisors (NAPA).
“Always interesting when the President of the United States talks ERISA!” NAPA CEO Brian Graff posted on LinkedIn Sunday. Holding a White House event to release the first public look at the text is said to demonstrate the importance the Biden Administration places on the issue.
The much anticipated and highly controversial proposal has been under review at the White House Office and Management and Budget since Sept. 8. Now that the OMB review is complete, the DOL will issue a Notice of Proposed Rulemaking (NPRM) in the Federal Register and will open the proposed rule for public comments.
The comment period will likely last for 60 days, and the DOL will then take those comments into consideration and go to work on a final regulation, taking another 60 to 90 days. Then it goes back to the OMB for review, and another 30 to 60 days after that it will get published in the Federal Register and become final.
Because of the time constraints imposed under the Congressional Review Act for an agency rule to take effect, it is anticipated that the DOL and the Biden Administration will try to finalize the rule no later than November 2024.
While no one outside of government insiders have seen the actual text of the new proposed rule to date, it is expected to address rollover recommendations and redefine fiduciary investment advice under the Employee Retirement Income Security Act (ERISA), according to a notice of proposed rulemaking published in early September.
A broad range of industry stakeholders have met with OMB in the past month to voice concerns about the proposal, including the American Retirement Association, NAFA, the Insured Retirement Institute (IRI), and the Institute for the Fiduciary Standard, among several others.
In its meeting back on Oct. 6, the National Association of Insurance and Financial Advisors (NAIFA) told officials from the Office of Information and Regulatory Affairs (OIRA) of the OMB that the DOL’s current efforts to revive a fiduciary-only regulation for financial professionals is unnecessary and likely to harm low- and middle-income consumers.
“NAIFA members work in their clients’ interests because it’s the right thing to do and because it’s good business. Backing that up is a strong slate of existing state and federal regulations,” NAIFA CEO Kevin Mayeux said in a statement. “Additional action by the DOL at this time would create confusion for advisors and consumers without providing meaningful consumer protections. There is no need for the DOL’s current fiduciary proposal, and it would very likely bring unintended consequences harmful to the consumers the DOL aims to protect.”
Mayeux said the regulatory landscape has changed significantly to provide greater protections to consumers since NAIFA engaged in litigation that struck down the DOL’s 2016 Fiduciary Rule.
401(k) Specialist will provide a link to the text of the new proposal once it is released.
SEE ALSO:
• First Public Look at New DOL Fiduciary Rule Coming Soon
• Republican Lawmakers Push DOL to Halt Work on Fiduciary Rule
• Talking DOL Retirement Saving Priorities with EBSA Head Lisa Gomez