Key Senator Presses DOL for Hearing on Fiduciary Proposal

Noting that the Department of Labor previously held several days of hearings under the former fiduciary rule, the ranking Democrat on the Senate committee with primary jurisdiction over ERISA-related issues has called on the DOL to hold a hearing.

 

The request comes from Sen. Patty Murray (D-WA), who would be poised to take over as Chair of the Senate Health, Education, Labor and Pensions Committee should the Democrats take control of the Senate.

Murray specifically requests a public hearing on the proposed prohibited transaction exemption (PTE), “Improving Investment Advice for Workers and Retirees,” released by the DOL on June 29.

 

“In 2015, the Department held four days of public hearings featuring testimony from over 80 different stakeholders,” Murray writes. She adds that, “Given the significance of this proposed rule and the fact the proposed PTE relies heavily on the Securities and Exchange Commission’s (SEC) Regulation Best Interest, the Department, as it has in the past, should formally engage and seek input from the public.”

 

Murray suggests that for the DOL to achieve its stated goal of “promoting regulatory efficiencies,” the department should consider a “tripartite hearing” that would also include the SEC to “ensure that both agencies and all affected stakeholders are on the same page.”

 

“These rules are too important to take shortcuts,” Murray further states, noting that a public hearing is “critical to a thorough understanding in light of the reliance on another federal agency’s regulation, as well as the numerous proposals and changes the Department has made over the past month in delineating ERISA’s fiduciary duties.”

 

Murray also reiterated her previous request that the DOL extend the 30-day comment period by an additional 60 days, contending that the current comment period is inadequate to provide thoughtful analysis.

 

“It would already be unacceptably difficult for the public to review this PTE thoroughly in the time provided; however, stakeholders face the added difficulty of reconciling the proposed PTE with the Department’s recent information letters, as well as a proposal on Financial Factors in Selecting Plan Investments, all of which were released in the past month,” she writes. 

 

Murray also criticized that proposal, contending that the DOL’s proposed regulation clarifying investment duties of ERISA plan fiduciaries in relation to environmental, social and governance (ESG) would discourage financial advisors from considering ESG criteria and ignores findings that show ESG investments outperform traditional investments.