More than 100 House Republicans signed a letter to Labor Secretary Thomas Perez, giving him two weeks to respond to their demand that stakeholders be able to review the changes the agency is making to its proposed fiduciary rule before it is finalized.
The letter, which originated out of the office of Rep. Mike Kelly, R-Pennsylvania, a member of the influential Ways and Means Committee, lays out many core concerns with the proposal highlighted in several other letters to Sec. Perez from lawmakers, both Republican and Democrat.
The proposal’s Best Interest Contract Exemption will effectively ban commission-based brokerage transactions and will be impossible for many investment brokers to implement, according to the Republican lawmakers.
“The proposed rule should not favor certain business models over others and should not force all investors into a one-size fits all approach that may not be in the best interest of all investors,” states the letter.
It also says the proposal risks restricting access to variable annuities and other lifetime income products, contradicting efforts by the Obama administration to expand retirement savers’ access to guaranteed income products.
The letter urges a “more meaningful consultation” with the regulatory bodies that oversee annuities.
And the lawmaker wants fiduciary exemptions extended to sponsors of small business plans. Under the proposal, only advisors to plans with more than 100 participants would be exempted from acting as fiduciaries.
Like other opponents of the DOL’s rule, the Republicans state that they are in favor of a best interest standard for investment advice.
But they have “serious reservations” that the proposal will disrupt access to advice for “many American families.”
“Given the scope of necessary changes and the significant consequences for retirement savers, we strongly urge you to provide stakeholders with an opportunity to review the changes before the rule advances and is submitted to the Office of Management and Budget,” wrote the Republican lawmakers.
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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.
