‘Good Will’ Hinting? Borzi Chides Congress, Hints at Executive Actions
At a recent event commemorating ERISA’s 40th anniversary, Phyllis C. Borzi, Assistant Secretary of the DOL’s Employee Benefits Security Administration (EBSA), did not directly address her agency’s forthcoming proposed change to the definition of a fiduciary. But then, she didn’t have to.
The as-yet-to-be-reproposed fiduciary definition changes (lately “rebranded” as the “conflict of interest rule”) weren’t the focus of Borzi’s remarks, but were surely on many minds, and implied in the context of her remarks.
During the BNA-sponsored celebration, dubbed “ERISA@40,” Borzi took the stage and wistfully described ERISA’s initial passage and what she called its various “tweaks” over the past four decades, weaving in pit stops at significant points in her own career before and during her current tenure as ERISA’s top enforcer. Interestingly, the starkest contrast she drew along the way was not between the state of retirement benefits before and after ERISA’s passage in 1974, but rather the state of congressional politics then compared with 2014, and what that means for regulators.
“Back in the day, when people wanted to make changes, they passed legislation,” she lamented, eulogizing legislative democracy. She reminisced about once having the opportunity to interview Sen. Jacob K. Javits, a key sponsor of ERISA. Javits told her that the legislative process works if you have “people of good will” who can put aside their partisan differences to get the work done.
Suffice it to say, Borzi does not think the current Congress has those kind of people now, and commented that relying on the judiciary to make law constitutes an “abject failure of the system.” From her perspective, then, with two of three federal branches ill-equipped to deal with the massive growth of DC plans and IRAs since ERISA’s passage, and with the “investment risk falling squarely on the shoulders of those unqualified to handle it,” Borzi opined that the executive branch is now the most responsive to the public, and presumably in the best position to make changes.
In doing so, she signaled to the audience, and to the retirement plan industry, that she and her fellow regulators are going to stay engaged and involved — and we all know what that means.Ray Harmon, Esq., is government affairs counsel for ASPPA.