The Department of Labor’s new fiduciary rule, which has been beset with lawsuits and Congressional efforts ever since it was published in the Federal Register nearly a year ago, should be “rescinded or withdrawn,” according to the chairman of the House Education and Workforce Committee.
Chairman Tim Walberg (R-MI) sent a letter to new Labor Secretary Lori Chavez-DeRemer, stating that the Committee “recognizes that many burdensome regulations were developed at DOL during the Biden-Harris administration,” and listed the DOL’s fiduciary rule first and foremost among a list of 12 regulations that the Committee thinks should be rescinded or withdrawn under Chavez-DeRemer’s new DOL leadership.
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Other regulations mentioned in the letter that Walberg “encouraged” the DOL Chief to “rescind” include the Pension Benefit Guaranty Corporation’s new overpayment requirement to multiemployer pension plans for deceased beneficiaries and the new requirements under the Mental Health Parity and Addiction Equity Act.
The new fiduciary rule, which is the DOL's latest attempt to extend fiduciary responsibilities to annuity sales, regulating that advisors act in the best interests of clients. However, the new rule, which had been scheduled to take effect last September, has hit legal roadblocks from the get-go filed by industry firms and member trade groups, including the Federation of Americans for Consumer Choice and the American Council of Life Insurers, which filed separate suits.
Under the Biden administration, a federal judge put the DOL's new Retirement Security Rule, which was set to go into effect last September, on hold, and it seemed likely it would remain there until after the presidential election.
Then, in February, shortly after President Donald Trump took office, the DOL filed a motion in the U.S. 5th Circuit Court of Appeals to hold its appeals in the two court cases regarding the rule. The court agreed to pause the consolidated appeals, which were initiated under the Biden administration.
Related: New fiduciary rule on hold again, as DOL puts a pause on its appeal of the federal court stays
Under the new Trump administration, the DOL wanted “to allow new DOL officials sufficient time to become familiar with the issues in these cases and determine how they wish to proceed,” the DOL’s motion stated. At the time, the DOL was requesting status reports due at 60-day intervals.
“With the inauguration of President Donald J. Trump and your confirmation as Secretary of Labor,” concludes Walberg’s letter, “we have an opportunity to improve the lives of workers, job seekers, and retirees.”
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
