The Department of Labor has scheduled a public hearing next month on a proposal to reform investment advice standards for retirement accounts.
The session will be held on Sept. 3 and perhaps extend to Sept. 4 as well, according to a notice posted on the Federal Register website. The testimony in the virtual hearing will be limited to individuals who submitted a comment or hearing request by the Aug. 6 comment deadline.
The decision marks a reversal for the agency, which denied requests earlier this month from Democratic lawmakers and others for a hearing.
The DOL proposal would provide an exemption to allow retirement plan investment fiduciaries to receive compensation — such as commissions, 12b-1 fees and revenue sharing — that would otherwise be prohibited as long as they act in the best interests of plan participants.
The measure would replace an Obama administration rule that was vacated by a federal appeals court in 2018. It has generated criticism from Democrats and investor advocates, who say it would allow retirement plan advisers to sidestep fiduciary duty and maintain conflicts of interest that hurt retirement savers.
Both groups pushed for an extension of the comment period from 30 days to 90 days, which was denied, and a hearing, which has now been granted.
“Since publication in the Federal Register, there has been considerable interest expressed regarding the proposed prohibited transaction exemption, as well as several public comments requesting a hearing,” the Federal Register notice states. “The Department has decided to hold a public hearing on this proposed prohibited transaction exemption to provide commenters an opportunity to present material factual issues that cannot be fully explored through written submission.”
Earlier this month, Joe Wheeler, a DOL deputy assistant secretary, told Sen. Patty Murray, D-Wash., and ranking member of the Senate Health Education Labor and Pensions Committee, that a hearing was unnecessary because the proposed exemption was much narrower in scope than the Obama-era rule.
Former DOL officials noted that the agency usually grants hearings on proposed rules if they're sought by lawmakers.
A Labor Department spokesperson was not immediately available for comment.
The revised DOL fiduciary rule would align with the Securities and Exchange Commission’s Regulation Best Interest, the new broker advice standard that was implemented on June 30.
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