EBSA Sets Out Carrot, Stick Agenda

Actually, newly enshrined Assistant Secretary of Labor Phyllis Borzi (see Borzi EBSA Nomination Approved by Senate) told the audience at the ASPPA/DoL Speaks conference in Washington, D.C., this week that, while her boss (Labor Secretary Hilda Solis) is fond of the new sheriff mantra, she prefers to say that now there is a sheriff in town—and one that talks as though it will use both a carrot and a stick.    

While early bets are that the new leadership at DoL will set a different course (some say a very different course) than its predecessors, Borzi laid out a new and vigorous plan for the Employee Benefits Security Administration (EBSA) that she now heads. “Right now we have a full plate,” she acknowledged, but it was clear that enforcement of the law and promises made will be a driving focus.  “The previous Administration focused on compliance assistance,” she noted, “but that’s only good if it is combined with strong enforcement.”  

Regulatory Wrap-Up  

On the regulatory front, Borzi said that a priority would be to finish the work started by the prior Administration, with the “first out of the box” to be investment advice.  “We share concerns that workers will benefit from quality investment advice,” she said—and then proceeded to express a different sense of what would fulfill that definition.  She noted that the final regulations on investment advice—published in January—were criticized by some as going too far.  She said DoL was “taking a fresh look, working to bring the regulations closer” to the provisions in the Pension Protection Act (in an aside, she noted that PPA was “an oxymoron if ever I heard one”).  “We’re very close to completing that review,” she said, and the Department hoped to announce a “substantive decision in the near future.” 

It seems likely, however, that the final product will be different from the last version.  Borzi said that the most likely outcome of the process would be a complete withdrawal of the regulations (rather than trying to amend the current version) and a new issuance, followed by what she described as a “fairly short comment period.”  She acknowledged the current deadline of November 18 for publishing final regulations (following the January hold, and two subsequent deferrals while the DoL solicited and absorbed comments - see EBSA Again Extends Effective Date of Advice Rule) but noted, “Nothing is simple.”