DOL must keep dialogue open on fiduciary rule

Sudden withdrawal of DOL's Timothy Hauser from a panel at the Insured Retirement Institute conference was a blunder.

Whatever the reason, the sudden withdrawal of Deputy Assistant Secretary of Labor Timothy Hauser from a panel at the Insured Retirement Institute conference June 6 was a blunder.

Mr. Hauser had an opportunity to clarify some of the issues, and answer questions, arising from the Department of Labor’s new regulation imposing a fiduciary standard on those giving investment advice on retirement accounts.

The DOL, through Mr. Hauser, could have used the opportunity to defuse some of the concerns among at least some of the providers of financial services to retirees.

Given the timing, just days after IRI joined a lawsuit seeking to vacate the new fiduciary rule, the most likely explanation for Mr. Hauser’s withdrawal from the panel was concern he could say something that might jeopardize the DOL’s defense in the case.

MORE THAN CAPABLE

But surely Mr. Hauser could handle himself on such a panel and answer “no comment” to any question that might lead him into the territory of the suit. He is a Harvard Law School graduate and was a trial attorney before joining the DOL in 1991. He has represented the department in federal district court and appellate litigation. He has more than enough experience to recognize and avoid landmines in questions at a conference. Or perhaps the case for the regulation is not as strong as some believe.

RETALIATION?

The other possible explanation for his withdrawal was retaliation for IRI’s joining in the case against the regulation. That would be petty and unworthy of a powerful government department, especially as the government, and government employees, are sup- posed to work for, and answer to, the citizenry. But that explanation seems uncharacteristic of Mr. Hauser, who showed his diplomatic and unflappable side at the four days of hearings the DOL held last summer on the rule, in which he deflected criticism with humor.

Either way, it was a missed opportunity for both sides. Mr. Hauser could have forcefully made the case for the regulation and the conference attendees could have learned more about its implications for their businesses as they prepare to implement it.