Portman, Cardin Weigh in on Fiduciary Proposal
The team of Portman and Cardin have put their heads, and pens, together in a letter to Labor Secretary Tom Perez
about the Department of Labor’s (DOL’s) fiduciary proposal.
Of course, then-Representatives Rob Portman (R-Ohio) and Ben Cardin (D-Md.) led the charge in the House for the Economic Growth Tax Relief and Reconciliation Act on 2001 (EGTRRA), which set higher contribution limits, simplified discrimination tests, created the Savers’ Credit, and provided incentives for small-business retirement programs. Many in the industry came to refer to the bill as “Portman-Cardin” in acknowledgement of their leadership there.
The Dec. 4 letter from the two legislators (both now senators), while supporting the concept of a best-interest standard, conveyed a concern that the proposed rule, certainly in its current form, “could diminish the availability of low- and middle-income savers to afford or access advice,” as well as diminishing the availability of advice for small businesses, and “access to retirement products that provide lifetime income.”
However, the letter went on to state that the senators felt “very strongly that Congress has an important role to play in this debate,” that Congress “designed the retirement framework in place today,” and that “Congress can and should continue to examine our retirement framework to address any needed changes.”
The senators went on to distinguish the role of Congress, noting that “unlike any other actor in retirement policy” Congress has jurisdiction over every aspect of the savings landscape, and that while the senators “greatly appreciate” the DOL’s efforts in addressing “critical pieces” of that landscape, that it was important for Congress “to examine the entire retirement policy framework and, if needed, work to design updates to our system.” They went on to state that that involvement could take many forms, including “acting in close coordination with the DOL to provide input” on the proposed rule, or “designing a legislative solution that imposes a best interest standard, as some of our colleagues are contemplating” — the latter likely a reference to a bipartisan effort announced recently by a bipartisan group of congressmen.
It would be nearly impossible to read the letter as anything but a caution light to the DOL as it works to finalize the fiduciary proposal.
On the other hand, it didn’t exactly call for a screeching halt.