Another call for the Department of Labor’s controversial final fiduciary rule to be rescinded was made this week in the form of a letter from Chairman of the House Committee on Education and Workforce Rep. Tim Walberg (R-MI) to newly confirmed DOL Secretary Lori Chavez-DeRemer.
In the March 19 letter, Walberg urged Chavez-DeRemer to “rescind or withdraw” the fiduciary rule, put forth by previous DOL leadership under the Biden-Harris administration.
Walberg wrote that the Committee on Education and Workforce “recognized that many burdensome regulations were developed at DOL during the Biden-Harris administration,” and listed the EBSA’s fiduciary rule first among a list of 12 regulations that the Committee thinks should be rescinded or withdrawn under Chavez-DeRemer’s new DOL leadership.
“With the inauguration of President Donald J. Trump and your confirmation as Secretary of Labor, we have an opportunity to improve the lives of workers, job seekers, and retirees,” the letter states. “In your new role, I encourage you to consider the issues raised in this letter and to remain in proactive contact with the Committee as other agenda items arise. I look forward to working with you and DOL during the 119th Congress.”
The DOL finalized the latest iteration of the Retirement Security Rule in April 2024, seeking to expand the definition of an investment advice fiduciary under the Employee Retirement Income Security Act (ERISA). It aimed to ensure that financial advisors act in the best interests of retirement savers and was scheduled to take effect on Sept. 23, 2024.
Today, the rule remains in a state of legal uncertainty due to recent judicial actions. In July 2024, two federal district courts in Texas issued rulings staying the effective date of the rule. These courts expressed concerns about its validity, suggesting that the plaintiffs challenging the rule were likely to succeed on the merits of their claims.
In Sept. 2024, the DOL under previous pre-election leadership filed an appeal to reverse the two federal court stays that halted its Retirement Security Rule. Then in February as the Trump administration took over, the DOL requested a pause in its appeal of the two stays issued to the rule and was granted the request within days by the Fifth Circuit U.S. Court of Appeals. The pause was intended to allow the new DOL officials sufficient time to become familiar with the issues in the cases “and determine how they wish to proceed,” the Trump administration said at the time.
While the rule’s future could depend on the outcome of ongoing litigation, those cases could be rendered moot if the DOL decides to rescind or withdraw the rule.
SEE ALSO:
• Trump EBSA Nominee Aronowitz Calls for Specialized ERISA Court
• 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.
