The Department of Labor (DOL) announced that the Employee Benefits Security Administration (EBSA) published the unofficial transcripts of its online hearing on the Notice of Proposed Rulemaking, “Retirement Security Rule: Definition of an Investment Advice Fiduciary” and related proposed prohibited transaction exemption amendments.
The hearing, held on Dec. 12 and Dec. 13, featured American Retirement Association CEO Brian Graff, who testified in favor of the rule and specifically the importance of providing plan-level advice protection for small businesses.
“Investment advice given to small business plan sponsors is also not protected by SEC’s Regulation Best Interest because ‘plan-level’ advice is considered ‘institutional advice,’ even if we are talking about an unsophisticated small business owner with just two employees,” Graff said in his testimony, before adding that the SEC told the ARA it believed such advice belonged within DOL’s jurisdiction.
He also emphasized that under the current federal and state regulatory framework, most small business owners trying to offer a retirement plan to their employees are often provided no regulatory protection from the advice they receive regarding plan investment options.
The DOL said the latest iteration of the proposal seeks “to protect investors saving for retirement by requiring trusted advice providers to adhere to high standards of care and loyalty when making investment recommendations and to avoid recommendations that favor their financial interests at the expense of the investors.”
“The Employee Benefits Security Administration thanks the more than 40 witnesses who appeared at the online public hearing, as well as those who have submitted or are planning to submit a public comment,” Assistant Secretary for EBSA Lisa Gomez said in a statement. “We will carefully consider the public’s input as we continue work on this important rulemaking.”
Video recordings of the hearing were also made available on Dec. 19, 2023. The proposed rule and proposed exemption amendments contain a 60-day comment period that is scheduled to close on Jan. 2, 2024.
