Expressing concerns that the Labor Department’s fiduciary proposal is “…motivated by an insatiable desire to reengineer the retirement services industry and control the mode and manner that Americans save for retirement,” a group of Republican congressmen is calling on the DOL to withdraw the rule.
In a letter addressed to Secretary of Labor Thomas Perez as a response to the Labor Department’s request for comment on the proposal, Republican members on the House Education and the Workforce Committee say they are concerned with the impact the proposal will have on low- and middle-income families and small businesses.
The letter cites concerns about a “rushed process, which has led to an ill-considered regulatory proposal rife with unanswered questions and unintended consequences”, and notes that the proposal was under review at the Office of Management and Budget for less than 60 days, while the average review of DOL proposals is nearly 120 days.
The letter outlines concerns that implementation of the rule as proposed would mean that financial advice for many low- and middle-income families — specifically, help in rolling over funds from a 401(k) to an IRA and determining how funds are to be distributed upon retirement — would be prohibited, and that those same low- and middle-income families with fewer resources to invest will lose access to advice or have to pay substantially higher fees in order to continue seeing their trusted advisors.
Moreover, it states that small business owners will be denied assistance in selecting the right investment options for their employees, which means that fewer small businesses will offer employees a retirement plan.
The letter also restates previously articulated concerns about the level of coordination with the SEC, to which it says the Labor Department has thus far “…refused to provide a complete response.”
