Citing “a voluminous amount of information” in the fiduciary re-proposal from the Department of Labor (DOL), 16 groups wrote the DOL asking for a 45-day extension of the 75-day public comment period.
“If adopted, the proposal would represent a watershed event touching many facets of the financial services industry,” the letter said. Among the groups signing the letter were the American Retirement Association, the Investment Company Institute ICI), the Insured Retirement Institute (IRI) and the National Association of Insurance and Financial Advisors (NAIFA).
The industry would need time to assess, among other detailed changes, a new exemption that would subject advisers dealing with individual retirement accounts (IRA) to increased legal risk for violations of strict prudence requirements. The conditions of the exemptions are foundational for many financial services companies in order to provide essential services to retirement investors, but could require significant policy and practice changes. Companies would also need to produce expansive new disclosures, the letter said.
Attorneys with deep experience in the Employee Retirement Income Security Act (ERISA) have acknowledged that the financial industry needs more time to digest the potential implications of the complex proposal.
But chances for an extension are unlikely. During the media call describing the new proposal, DOL Secretary Thomas Perez was asked if the Office of Management and Budget’s (OMB) review of the rule language was rushed or if he felt the comment period was too tight. He responded somewhat impatiently that the DOL had been working on the effort for five years, suggesting the idea this effort is being rushed is absurd.
The letter outlines other review and comment time frames from the earlier iterations of the proposal and notes that the 2010 version was shorter, less complicated and didn’t contain any exemptions. The groups seek “a more thoughtful and comprehensive input, which will ultimately increase the possibility for a more workable final rule that would benefit all parties.”
Other groups signing the letter, which can be read here, are: the Financial Services Roundtable, the Securities Industry and Financial Markets Association (SIFMA), Financial Services Institute (FSI) and the U.S. Chamber of Commerce.