Labor Secretary Says SEC Will Work With DOL on Fiduciary Rule

In addition, Acosta said the DOL’s budget proposal funds an effort to improve ERISA disclosures to retirement plan participants.

During live testimony before the U.S. Senate Subcomittee on Labor, Health and Human Service, Education and Related Agencies Committee on Appropriations, Secretary of Labor R. Alexander Acosta was questioned about the Department of Labor (DOL)’s budget proposal for FY 2018, as well as other topics.

Senator Patty Murray (D-Washington) told Acosta that businesses are complaining about burdensome regulations, including the fiduciary rule. Acosta replied that the agency is examining all regulations on the books to determine if they are necessary.

In a surprise response to a question from Senator James Lankford (R-Oklahoma) about whether the DOL is having conversations with the Securities and Exchange Commission (SEC) about the fiduciary rule, Acosta claimed that previously the SEC did not work jointly with the DOL on the rule. Acosta told the committee he has asked the new SEC chair whether the SEC will work with the DOL on reviewing the rule and the SEC chair is willing to do so. “As they receive [a full staff] of commissioners, they will work with the DOL,” he said.

In a general comment, Acosta said he believes compliance assistance is more important than enforcement, and he also believes it is better to prevent violations than to wait until something happens and the DOL has to sue.

Among other topics, to date, the position for Assistant Secretary for the DOL’s Employee Benefits Security Administration (EBSA) has not been filled. When asked by Senator Lamar Alexander (R-Tennessee) when the Senate will get more nominations for subcommittee leadership, Acosta noted that he is approaching his 60-day mark as Labor Secretary and his goal is to have subcommittee leadership in place by then.

NEXT: Improving ERISA disclosures and a proposal for the PBGC

Senator John Kennedy (R-Louisiana) asked Acosta about a $4 million appropriation in the budget for the Senior Community Services Employment Program. Acosta explained that the purpose of this program is to transfer seniors into unsubsidized employment. Data has shown that many retirement-age workers want to or need to continue working.

Senator Joe Manchin (D-West Virginia) who earlier this year, along with Senator Shelley Moore Capito (R-West Virginia), introduced the Miners Protection Act, designed to preserve federally guaranteed pension and disability plans for coal industry workers, asked Acosta what is agency is doing to help coal miners in that effort. Pension plans for coal miners are approaching insolvency due to both the financial crisis and a string of bankruptcies in the coal industry. Acosta only said the DOL is looking at options and having discussions.

In his written testimony, Acosta said, “Our experience indicates that the volume and complexity of Employee Retirement Income Security Act (ERISA) disclosures can be overwhelming for some participants and beneficiaries. Complying with ERISA’s disclosure requirements and effectively communicating with employees can be a particular challenge for small businesses that may not have a dedicated human resources department with employee benefits specialists. The Budget includes a $1.3 million funding increase to improve the quality, readability, and delivery of ERISA disclosures to people in plans sponsored by small businesses.”

Also in his written testimony, Acosta says the DOL’s budget proposes premium reforms for the Pension Benefit Guaranty Corporation (PBGC)’s multiemployer insurance program that will improve the solvency of the program.