Members of the U.S. House of Representatives have sent a letter to Secretary of Labor Thomas Perez expressing concerns over the Department of Labor’s (DOL) proposed regulation to expand the definition of fiduciary investment advice under the Employee Retirement Income Security Act (ERISA).
Led by Representatives Mike Kelly (R-Pennsylvania) and Sam Johnson (R-Texas), the lawmakers urge the DOL to make “substantial changes to address the shortcomings of the proposed rule…” They also ask that the DOL “provide stakeholders with an opportunity to review the changes before the rule advances and is submitted to the Office of Management and Budget.”
“Any regulation to expand the definition of investment advice should enhance retirement security by increasing access to retirement savings and improving income security during retirement while also preserving investor choice and improving access to financial guidance and education,” the letter states. The lawmakers contend that the current proposal does not meet these goals.
While they say they support the creation of a best interest standard for investment advice, the members of Congress note they have “serious reservations” that the proposal will severely disrupt the availability of affordable financial education and investment advice and restrict product choice and retirement security for many Americans.
The letter asks for a written response from Perez within 15 days.
The DOL has received more than 3,000 comments about its proposal, with many commenters expressing that it would do more harm than good, especially for savers with low retirement account balances.