The chair of the House committee with jurisdiction over ERISA issues was not happy with the Department of Labor’s (DOL) recent decision to deny a request to extend the comment period for the proposed rule to amend the definition of an investment advice fiduciary.
In a Nov. 17 letter to Acting Labor Secretary Julie Su, Rep. Virginia Foxx (R-N.C.), who serves as chair of the House Education and the Workforce Committee, called on the DOL to extend its public comment period on the proposal by 60 days for a total of 120 days. In addition, Foxx urged the DOL to hold its public hearing on the proposal 30 days following the close of the initial comment period, and open a second 30-day comment period after the hearing.
“Any regulations that could alter the methods and relationships currently delivering retirement advice to American workers will have far-reaching implications. It is critical that stakeholders are afforded the opportunity to evaluate and provide substantive and informed comments on the Proposal,” Chairwoman Foxx stated in her letter to Acting Secretary Su.
Foxx cited a Nov. 8 letter from 18 trade associations, which emphasized that the DOL’s proposed comment period lasts only 39 working days, and that there are multiple federal holidays during this period. “This time is inadequate for the retirement community to digest the consequences of the Proposal fully and to provide meaningful feedback,” Foxx stated.
The Education and the Workforce Committee chair goes on to note that, in its Nov. 14 response to the trade association letter, the Employee Benefits Security Administration (EBSA) revealed its plan to hold a public hearing on the proposal on December 12. “This hearing falls before the close of the comment period, which is already insufficient for stakeholders to weigh the ramifications of the sweeping Proposal appropriately,” wrote Foxx.
As such, Rep. Foxx requested that any public hearing take place no less than 30 days after the comment period has closed and all comments have been publicly posted. “This time is critical to allow the affected community, and the hearing participants in particular, to formulate their comments and to review and consider comments filed by others,” she noted.
APA Violations?
In further arguing that it’s critical that stakeholders are afforded the opportunity to provide informed comments, Chair Foxx suggests that DOL may be violating the Administrative Procedures Act (APA).
To that end, she explains that courts have examined agency actions under the APA to determine whether an agency has structured the analysis and framed the issues to ensure that the outcome of the administrative process, such as the notice-and-comment process, is predetermined.
“It appears that EBSA designed the comment period to prevent fulsome interaction with the community that would be charged with implementing its disastrous proposal,” Foxx wrote in the letter to Su. “EBSA also stated in its response to the trade association letter that it ‘believes that its current proposal reflects significant input it has received from public engagement with this project since 2010.’ This is a strong indication that the outcome is predetermined in violation of the APA,” Foxx contended.
Chair Foxx has asked Acting Secretary Su to respond to her request no later than Nov. 27, 2023.
