Skip to main content

You are here

Advertisement

Senate Makes Moves to Block Fiduciary Rule

Wrapping up a first week of February with action on legislation designed to block, slow or thwart the Department of Labor’s (DOL) fiduciary rule, the U.S. Senate finally got into the act with two pieces of legislation.

Sen. Johnny Isakson (R-Ga), chairman of the Senate Health, Education, Labor and Pensions Subcommittee on Employment and Workplace Safety, on Feb. 4 introduced the Affordable Retirement Advice Protection Act that would require a vote by Congress before any final rule by the administration goes into effect.

On the same day, Sen. Roy Blount (R-Mo.) introduced the Retail Investor Protection Act, legislation that its sponsors said would ”prevent the DOL from moving forward on an unnecessary and burdensome new regulation that will make it harder for Missourians, and all Americans, to save for retirement.” Co-sponsors of the bill included Sens. Mike Crapo (R-Idaho), Steve Daines (R-Mont.), Johnny Isakson (R-Ga), Mark Kirk (R-Ill.) and Shelley Moore Capito (R-W.V.). The bill was a companion to a version introduced and voted on last fall in the House by Rep. Ann Wagner (R-Mo.).

House Calls

Earlier in the week, the House Ways and Means Committee voted in a (slightly) bipartisan 26-12 vote to pass the Strengthening Access to Valuable Education and Retirement Support Act of 2015 (a.k.a. the SAVERS Act) (H.R. 4294), as amended. The legislation was introduced by Oversight Subcommittee Chairman Peter Roskam (R-Ill.) and Rep. Richard Neal (D-Mass.), the Ranking Member on the Tax Policy Subcommittee. As did legislation approved Feb. 1 by the House Committee on Education and the Workforce, the SAVERS Act would require an affirmative vote by Congress before any final rule issued by the DOL goes into effect; if Congress fails to approve the DOL rule, a new fiduciary standard would take effect.

As for the Senate bills, according to a press release, Isakson’s legislation would amend ERISA to raise investment advice standards for the retirement industry and strengthen protections for those saving for retirement. It would also require prior approval by Congress of any investment advice rule proposed by the Obama administration.

In addition to introducing the Affordable Retirement Advice Protection Act, Isakson is an original cosponsor of the Strengthening Access to Valuable Education and Retirement Support (SAVERS) Act introduced by Sen. Mark Kirk (R-Ill.) Both bills seek to block the DOL’s fiduciary rule and provide what they claim is a viable alternative that would:

  • raise standards for the retirement services industry and strengthen protections for savers by directing retirement advisors to serve in their clients’ best interests;

  • penalize financial professionals who violate the trust of their clients;

  • require clear communication of key information by advisors to ensure investors are well informed to make investment choices; and

  • ensure that advice and investment options are available to individuals seeking retirement savings guidance to best meet their needs and circumstances.

The DOL delivered its fiduciary proposal to the White House Office of Management and Budget (OMB) on Jan. 28. Before agency rules are published, they are reviewed by the OMB’s Office of Information and Regulatory Affairs, which has up to 90 days to act.