Preston Rutledge, senior aide on Senate Finance Committee, could be filling Phyllis Borzi's old post at DOL

The panel's senior tax and benefits counsel would be the point person on the Department of Labor's fiduciary duty rule

Oct 11, 2017 @ 2:42 pm

By Mark Schoeff Jr.

A senior aide on the Senate Finance Committee could be in line to be the next point person on the Labor Department's fiduciary duty rule.

President Donald J. Trump will nominate Preston Rutledge, senior tax and benefits counsel on the panel, as the next DOL assistant secretary for the Employee Benefits Security Administration, according to a report in Politico, a Washington publication focusing on politics and policy.

Mr. Rutledge would fill the same position that Phyllis Borzi, known as the "mother of the DOL rule," held in the Obama administration when the regulation was finalized.

If confirmed by the Senate, Mr. Rutledge would be influential in the agency's ongoing review of the regulation that was ordered by Mr. Trump earlier this year. The re-assessment could lead to changes to the enforcement mechanisms of the regulation, which requires brokers to act in the best interests of their clients in retirement accounts.

Capitol Hill staffers usually operate behind the scenes and don't get out in front of their bosses on policy matters. That makes it a challenge to predict how Mr. Rutledge will approach the regulation.

"I'm not aware of any public position he's taken on that issue," said Brian Graff, chief executive of the American Retirement Association.

Dallas Salisbury, former president of the Employee Benefit Research Institute, has known Mr. Rutledge for several years.

"He is smart, balanced, ethical — a fact-based analyst and policy person," Mr. Salisbury wrote in an email. "His work on some public sector pension and defined-benefit issues suggests he would review the fiduciary regulation, and all others, objectively, based upon the facts and the law and take only actions he felt met the law."

A spokeswoman for the Senate Finance Committee referred an interview request for Mr. Rutledge to the White House. A White House spokesperson was not immediately available for comment. Mr. Rutledge has not yet been formally nominated.

While on the Senate Finance Committee staff, Mr. Rutledge worked on the Secure Annuities for Employee Retirement Act, which would have given the Treasury Department, rather than DOL, jurisdiction over rules pertaining to individual retirement accounts, a move that would have undermined the DOL fiduciary rule. The bill has not become law.

Mr. Rutledge, who was a tax law specialist at the Internal Revenue Service prior to joining the Senate committee, according to his LinkedIn profile, was praised for his mastery of the areas he would oversee at DOL.

"He is one of the most knowledgeable people I know in town when it comes to employee benefits policy," said Jill Hoffman, vice president of government affairs at the Financial Services Roundtable.

Mr. Graff made a similar assessment.

"It's important that someone knowledgeable about retirement policy issues is in that position, and he certainly fits that bill," Mr. Graff said.

Observers said that Mr. Rutledge was instrumental to the Senate Finance Committee's bipartisan approval of the Retirement Enhancement and Savings Act last year. The bill did not get a vote in the Senate, and would have to be re-introduced during the current session of Congress.

"Preston Rutledge has been an outstanding champion for common-sense solutions to increase retirement security for all Americans," Lee Covington, senior vice president and general counsel at the Insured Retirement Institute, said in a statement.

The DOL is seeking a delay from Jan. 1, 2018, to July 1, 2019, for the implementation of the remaining parts of the fiduciary rule. Interest groups are eager to have a new EBSA director, as the DOL's review continues.

"We would encourage the White House to move swiftly because it's important to have someone in that position," Mr. Graff said.

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