Mar.Education and Workforce Committee Questions DOL Secretary Solis on Definition of Fiduciary
At a House Education and the Workforce Committee Hearing on March 21, members heard testimony from Department of Labor (DOL) Secretary Hilda Solis on the President’s fiscal year 2013 budget proposal.
In her testimony Solis highlighted some of the current initiatives the DOL is focusing on. She noted that while unemployment has dropped since the American Recovery and Reinvestment Act of 2009 was passed, with 12.8 million Americans still out of work there is more to be done.
Much of the hearing focused on the Workforce Investment Act (WIA), Occupational Safety and Health Administration (OSHA) regulations, and the pending definition of fiduciary re-proposal under the Employee Retirement Income Security Act of 1974 (ERISA).
During the question and answer portion of the hearing, Rep. Judy Biggert (R-Ill.) thanked Solis for the withdrawal of the DOL’s proposed definition of fiduciary, but expressed concerns over the broad range of data the DOL has requested from the financial industry for a cost-benefit analysis, wondering if the data requested could compromise investor privacy. Solis responded that the industry has been reluctant to give any information and said DOL Assistant Secretary Phyllis Borzi is working with the industry and stakeholders to get more information.
Biggert also mentioned the Securities and Exchange Commission’s (SEC) plans to issue a Request for Information (RFI) regarding Section 913 of the Dodd-Frank Act, which aims to create a uniform fiduciary standard. She asked if the DOL plans on coordinating with the SEC, either by issuing a joint RFI or by incorporating the RFI’s findings into the DOL rule. Solis said the DOL plans to work with the SEC but could not say for certain if the DOL would issue a joint RFI.
Biggert asked how the newly proposed regulation will differ from the original, but Solis said the DOL is in the middle of the rulemaking process and she is not at liberty to say.
Rep. Phil Roe (R-Tenn.) asked what problem the DOL is attempting to solve with the proposed definition of fiduciary rule. Solis said the DOL is trying to protect the retirement savings of all Americans.
Rep. Carolyn McCarthy (D-N.Y.) also asked about the definition of fiduciary in the proposed rule, saying she supports the initiative as the industry has “no doubt” changed since 1974 when ERISA was enacted; however, she expressed concern with how the DOL has conducted this particular rulemaking process. She also expressed concerns that the DOL is not fully coordinating with other agencies, particularly the SEC. Solis said the DOL has been working with other agencies and she wants to ensure all concerned parties are heard before the re-proposal is submitted.
Rep. Rush Holt (D-N.J.) expressed concern that the DOL is asking the “wrong questions” regarding their data collection efforts for the cost-benefit analysis of the fiduciary rule re-proposal. He asked if the DOL has finished collecting data. Solis responded “definitely not” and said the DOL is “not in a hurry” to do so.
More information on the hearing can be found here.
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At a House Education and the Workforce Committee Hearing on March 21, members heard testimony from Department of Labor (DOL) Secretary Hilda Solis on the President’s fiscal year 2013 budget proposal.
In her testimony Solis highlighted some of the current initiatives the DOL is focusing on. She noted that while unemployment has dropped since the American Recovery and Reinvestment Act of 2009 was passed, with 12.8 million Americans still out of work there is more to be done.
Much of the hearing focused on the Workforce Investment Act (WIA), Occupational Safety and Health Administration (OSHA) regulations, and the pending definition of fiduciary re-proposal under the Employee Retirement Income Security Act of 1974 (ERISA).
During the question and answer portion of the hearing, Rep. Judy Biggert (R-Ill.) thanked Solis for the withdrawal of the DOL’s proposed definition of fiduciary, but expressed concerns over the broad range of data the DOL has requested from the financial industry for a cost-benefit analysis, wondering if the data requested could compromise investor privacy. Solis responded that the industry has been reluctant to give any information and said DOL Assistant Secretary Phyllis Borzi is working with the industry and stakeholders to get more information.
Biggert also mentioned the Securities and Exchange Commission’s (SEC) plans to issue a Request for Information (RFI) regarding Section 913 of the Dodd-Frank Act, which aims to create a uniform fiduciary standard. She asked if the DOL plans on coordinating with the SEC, either by issuing a joint RFI or by incorporating the RFI’s findings into the DOL rule. Solis said the DOL plans to work with the SEC but could not say for certain if the DOL would issue a joint RFI.
Biggert asked how the newly proposed regulation will differ from the original, but Solis said the DOL is in the middle of the rulemaking process and she is not at liberty to say.
Rep. Phil Roe (R-Tenn.) asked what problem the DOL is attempting to solve with the proposed definition of fiduciary rule. Solis said the DOL is trying to protect the retirement savings of all Americans.
Rep. Carolyn McCarthy (D-N.Y.) also asked about the definition of fiduciary in the proposed rule, saying she supports the initiative as the industry has “no doubt” changed since 1974 when ERISA was enacted; however, she expressed concern with how the DOL has conducted this particular rulemaking process. She also expressed concerns that the DOL is not fully coordinating with other agencies, particularly the SEC. Solis said the DOL has been working with other agencies and she wants to ensure all concerned parties are heard before the re-proposal is submitted.
Rep. Rush Holt (D-N.J.) expressed concern that the DOL is asking the “wrong questions” regarding their data collection efforts for the cost-benefit analysis of the fiduciary rule re-proposal. He asked if the DOL has finished collecting data. Solis responded “definitely not” and said the DOL is “not in a hurry” to do so.
More information on the hearing can be found here.