Dear Friends:
Earlier this month we shared with our friends and supporters some reflections about the state of affairs on the DOL fiduciary matter.
We hope everyone had a chance to read our prior email – which you can read here – where we make our views known that we do not think more rulemaking should be seen as inevitable and we actually hope DOL will now pause to allow other regulators (the NAIC and SEC) to do their jobs in adopting and implementing best interest requirements.
In the past week there have been a couple more developments which do not alter our overall views on this matter. One is DOL’s response to the magistrate judge in our case explaining how DOL views what remains of its fiduciary guidance following its loss in the ASA decision. The second is DOL’s updated “spring agenda” which still shows adoption of rulemaking to address fiduciary issues but has a revised timeline switching “12/00/22” to “8/00/23”. These items largely speak for themselves but do not change the larger narrative in our view.
Regarding the DOL submission in our case, we think DOL sidesteps the real issue, which is that the ASA decision knocked out the lynchpin of their New Interpretation in the sense it essentially blocks DOL from applying its guidance on who is a fiduciary in typical rollover situations when rollovers were the very reason for the DOL rulemaking in the first place. We also think it is noteworthy that the ASA decision was rendered four months ago and DOL has yet to formally acknowledge that court’s decision and follow through on the remand for “further proceedings consistent with this Order.”
As for the updated Spring regulatory agenda published by DOL showing a new target date of August 2023, FACC would observe that DOL has now moved that date forward a few times, and we remain very much of the view that further rulemaking is not needed and would be restrained by the various court rulings that have sharply curtailed DOL authority in this area. We are hoping that DOL will consider whether the time has come to suspend those rulemaking efforts to avoid further confusion and controversy in favor of permitting the industry’s functional regulators to proceed on the more constructive path of applying best interest requirements across all sales including retirement and non-retirement accounts.
As always FACC welcomes your input and thoughts and wishes to express its thanks for the wide support we have received from friends and supporters.
Kim
