Labor's Rutledge to depart at the end of May
Effort to craft Labor’s fiduciary rule to align with SEC’s Reg BI now is on the back burner, says former EBSA head Campbell.
Preston Rutledge, assistant secretary of Labor for the Employee Benefits Security Administration, will leave his post at the end of May. As head of EBSA, Rutledge has been charged with spearheading Labor’s new fiduciary rule to align with the Securities and Exchange Commission’s Regulation Best Interest.
As of Friday, that rule had yet to land at the Office of Management and Budget for review.
Labor Secretary Eugene Scalia said in a Friday statement that Rutledge “brought greater security to employees’ retirement and health care plans, and helped small businesses extend health care and retirement benefits to their workers.”
Rutledge’s two-and-a-half years at Labor “are a fitting capstone on an exceptional 25 years in government service. We will miss his counsel, and wish him all the best,” Scalia said.
Brad Campbell, former head of EBSA who’s now a partner at Faegre Drinker Biddle & Reath, told ThinkAdvisor on Friday that while Rutledge’s departure won’t result “in any additional delay to current outstanding projects at EBSA, given the strength of his deputy, Jeanne Wilson, and the importance of the agency’s mission to current events,” Labor’s fiduciary rule reboot has been pushed to the back burner.
“Reproposing the fiduciary rule is not at the top of the Department’s agenda,” Campbell said. “How far down it has slipped only time and publication of the spring regulatory agenda will tell.”
Moving the final electronic disclosure rule “ahead of the proposed fiduciary rule” makes sense, Campbell added. “That final rule will likely be completed in time to become a lasting regulation even if President Trump does not win reelection, while the proposed fiduciary rule likely will be only partway through the regulatory process by the end of the year.”
Susan Neely, president and CEO of the American Council of Life Insurers, added in a statement that Rutledge “was a champion of what became the Secure Act from start to finish — first as a legislative architect in the Senate, and then at EBSA.”
Sen. Patty Murray, D-Wash., ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, pressed Rutledge in early April to exercise Labor’s new authority provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act to extend filing deadlines for certain notice and disclosure requirements imposed by the Employee Retirement Income Security Act.
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