Leading Senate Republicans have added their voices to the chorus calling on the Department of Labor to slow down consideration of a rule designed to reduce conflicts of interest for brokers working with retirement accounts.
Three dozen GOP senators, including the party's leader in the chamber, sent a letter Tuesday to Secretary of Labor Thomas Perez, asking that he extend the comment deadline for the rule to 120 days from the current 75. Comments on the proposal are due July 6.
(You can read the senators' letter here)
The senators said the rule, which runs for hundreds of pages, is too complex to comment on by the middle of summer. Their concerns echo those of House and Senate Democrats, who sent similar letters to Mr. Perez last week.
“This is not an appropriate amount of time,” wrote Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health Education Labor and Pensions Committee, in Tuesday's letter signed by 35 of his Senate colleagues. “The proposed rule and exemptions will have a significant effect on countless working and middle-income Americans who have worked and saved so diligently to ensure a secure retirement.”
Mr. Alexander's committee provides oversight of DOL.
Others signing the letter included Senate Majority Leader Mitch McConnell, R-Ky., Sen. Orrin Hatch, R-Utah, who chairs the Senate Finance Committee, and Sen. Roy Blunt, R-Mo., who chairs the appropriations subcommittee that helps determine DOL funding.
A DOL spokesman was not immediately available for comment.
On Wednesday, the Financial Services Institute launched a Capitol Hill blitz in which some of its members held 200 meetings with congressional members and staff. The FSI, which represents independent broker-dealers and financial advisers, is among the interest groups pushing for an extension of the DOL comment deadline.
Proponents of the rule say those seeking a deadline extension are trying to
delay the measure to death. It's not clear whether the Obama administration will be able to finalize the rule before the president leaves office.
After the 75-day comment period ends, the DOL will hold a public forum within 30 days, publish the transcript and then take comments again.
The proposal, which would require brokers to act in the best interest of their clients in 401(k) plans and individual retirement accounts, was released on April 14 with the strong backing of President Barack Obama. The Obama administration said the rule is needed to protect workers and retirees from conflicted investment advice that eats away at their nest eggs.
The rule was originally proposed in 2010 but withdrawn in 2011 amid fierce protest from the financial services industry, which argued that it would significantly raise regulatory and liability costs for brokers and force them to abandon clients with modest assets in their retirement accounts.
