Under questioning at a May 1 hearing on Capitol Hill, Secretary of Labor Alexander Acosta appeared to confirm that the Department of Labor will issue a new fiduciary rule.
Acosta appeared before the House Education and Labor Committee for a hearing to examine the policies and priorities of the DOL. While Acosta’s written testimony did not address the DOL issuing a new rule, under questioning by Rep. Marcia Fudge (D-OH), he indicated that DOL is in discussions with the SEC as it works on its proposed investment advice rule.
Fudge grilled Acosta on what his plans are to protect workers from retirement advisors who “put their interest above their clients.” Acosta responded that the DOL is communicating with the SEC and that “based on our collaborative work, we will be issuing new rules in this area.”
When pressed further by Fudge as to timing, Acosta didn’t say specifically when the DOL would issue a rule, other than to say that the “SEC is in the process of producing those rules” and that his agency is “working with an independent agency.”
After the 5th U.S. Circuit Court of Appeals struck down the DOL’s previous fiduciary rule and the SEC moved forward with its own package, indications were that the SEC would take the lead and the DOL would issue guidance based on the SEC’s final rules. For example, at the April 7 opening general session of the 2019 NAPA 401(k) Summit in Las Vegas, Preston Rutledge, head of the DOL’s Employee Benefit Security Administration, commented that the SEC’s proposed rule was “a very welcome development,” adding that the DOL’s goal “is to align our rule with the SEC’s rule.”
In his May 1 testimony, Acosta touted the DOL’s October 2018 proposed regulation clarifying the circumstances under which a group or association of employers, or a professional employer organization (PEO) can act as an employer and sponsor workplace retirement plans under ERISA. He noted that the DOL is currently reviewing the public comments on that proposed rule.