Not wasting any time to start the new year, the House Financial Services Committee has announced a hearing to examine the Department of Labor’s proposed rule on the definition of investment advice fiduciary.
More specifically, the hearing titled “Examining the DOL Fiduciary Rule: Implications for Retirement Savings and Access” will be held by the House Financial Services Subcommittee on Capital Markets on Wednesday, Jan. 10 at 10:00 a.m. (ET).
The hearing announcement comes just one day after a Jan. 2 deadline passed to submit comments on the DOL’s proposed rule and about a month after the department held a two-day hearing on the rule. At last check, the DOL had received nearly 20,000 comment letters on the proposal, including comments by the American Retirement Association.
The subcommittee is chaired by Rep. Ann Wagner (R-MO), who has been a frequent critic over the years of the DOL’s efforts to revise the definition of fiduciary, going back to at least 2015 during the Obama administration when she introduced legislation to repeal the DOL’s then-fiduciary rule and create a new standard of conduct for brokers and dealers.
Most recently, she has been part of efforts to block the DOL from implementing its proposal by attempting to prevent the DOL from using any funds appropriated to the agency to “finalize, implement or enforce” the proposed rule, as well as the proposed amendments to class prohibited transaction exemptions (PTEs) available to investment advice fiduciaries. Those efforts will likely resume when the House and Senate return in full next week and face two deadlines (Jan. 19 and Feb. 2) to pass the remainder of the appropriation bills to fund the federal government for fiscal year 2024, which began Oct. 1.
The rulemaking package, named the “Retirement Security Proposed Rule and Proposed Amendments to Class Prohibited Transaction Exemptions for Investment Advice Fiduciaries,” was published in the Federal Register on Nov. 3, 2023. The DOL allowed 60 days for comments and denied several requests to extend the comment period.
The rulemaking package would amend the regulatory definition of the term fiduciary set forth at 29 CFR 2510.3-21(c) to “more appropriately define” when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code. EBSA also proposed amendments to existing PTEs to ensure what it describes as “consistent protection of employee benefit plan and IRA investors.”
Additional information regarding the hearing—including the livestream, committee memo, and witness list—can be found here and will be updated as the hearing date approaches.
