A Senate appropriations subcommittee passed a budget recommending a provision that would “restrain regulatory overreach” by the Department of Labor.
A similar provision passed in the House of Representatives last week.
President Obama has issued statements that he would vote other appropriations bills on the Department of Defense budget, proposed restrictions on the Environmental Protection Agency, and several riders that would affect funding for ObamaCare.
But to date, he has yet to say he would veto any budget that restricts the DOL’s ability to implement and regulate the agency’s proposed conflict-of-interest rule, which would require a fiduciary standard of care on advisors to 401(k) plans and IRAs.
In the House, lawmakers appropriated $11.7 billion in funding for the DOL next year, $206 million below last year’s level, and $1.4 billion below the amount President Obama requested. The Senate is proposing to allocate $11.4 billion to the DOL.
Language in the House bill was more affirmative than the Senate’s suggested provision on restricting the DOL’s ability to fund and enforce its proposed new fiduciary standard.
“None of the funds made available by this Act may be used to finalize, implement, administer, or enforce the proposed Definition of the Term ‘Fiduciary’,” according to language in the House’s 2016 budget.
“Through the inclusion of several important policy provisions, we have taken steps to rein in the excessive overreach of the Department of Labor,” said Rep. Tom Cole, R-Oklahoma, who chairs the House subcommittee responsible for funding the DOL.
An ongoing public comment period for the DOL’s fiduciary rule ends July 21. A public hearing for review of the rule will be held August 10 and likely last several days.
At a symposium on retirement policy at the Brookings Institution yesterday, Secretary of Labor Thomas Perez suggested the comments the agency has received so far will help finetune the Best Interest Contract Exemption provision of the proposed rule, which would contractually obligate all advisors to fully disclose the costs of the products they recommend to investors.
Perez reinforced the DOL’s commitment of finalizing and implementing a rule before the end of President Obama’s second term, according to reporting in ThinkAdvisor.
“We want to create an enforceable best-interest standard,” said Perez, according to ThinkAdvisor.
“We need to get into the modern ages of regulation. This [fiduciary rulemaking under ERISA] will be a sea change for some,” he added.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
