Another fiduciary rule? Lawmakers push DOL to stop further ‘confusing’ rulemaking
Sen. Bill Cassidy and Rep. Virginia Foxx sent a letter to Acting Labor Secretary Julie Su to “cease further action” on a new fiduciary rule, which has "created unnecessary instability for retirement plans."
Members of the Senate Committee on Health, Education, Labor and Pension last week sent a letter to acting Labor Secretary Julie Su, asking the Labor Department to stop further action on its pending fiduciary rule. Sens. Bill Cassidy, R-La., and Virginia Foxx, R-N.C., said the department had supported three separate definitions for what it means to be an investment advice fiduciary over the past two years and had thus “created unnecessary instability for retirement plans, retirees and savers.”
“The department’s misguided efforts to revise the definition of investment advice fiduciary have created confusion in the marketplace and unwarranted compliance expenses,” the letter said. The lawmakers requested that the DOL “cease further action” on this rulemaking.
The DOL’s Spring 2023 regulatory agenda shows that a fiduciary rule rewrite, amending the regulator definition of a fiduciary, may be released this summer, however, the proposal is not yet in the hands of the White House Office of Management and Budget.
In addition, Congressional Republicans plan to introduce a joint resolution that would nullify the Labor Department’s rule allowing retirement plan fiduciaries to consider environmental, social and governance factors when selecting investments and exercising shareholder rights. Every Senate Republican, along with Sen. Joe Manchin, D-W.Va., and Rep. Andy Barr, R-Ky., said that they will reintroduce the joint resolution under the Congressional Review Act.
“President Biden is jeopardizing retirement savings for millions of Americans for a political agenda,” Sen. Mike Braun, R-Ind., said. “In a time when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons. That’s why we are proud to stand up against this rule for the millions of Americans who depend on these funds for their retirement.”
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The Review Act enables Congress to disapprove by a simple majority vote a final rule issued by a federal agency if it has not been in effect for more than 60 legislative days. If a joint resolution of disapproval is enacted, the act stipulates that a rule may not be issued in substantially the same form unless it is specifically authorized by a subsequent law.