The Senate Committee on Health, Education, Labor, and Pensions voted during an executive session on Wednesday evening to advance Preston Rutledge’s nomination to serve as the Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA).
Rutledge currently serves as senior tax and benefits counsel on the Majority Tax Staff of the Senate Finance Committee, and as top aide to Senator Orrin Hatch, R-Utah. These ties to the government, and particularly to a legislator known for being active on retirement and labor issues, suggest a change in strategy from the president’s first effort to name the top official at the Department of Labor (DOL)—in effect Rutledge’s future boss. Readers may recall how the president’s first nominee for DOL Secretary, CKE Restaurants CEO Andrew Puzder, failed to gain the support of other government and industry stakeholders, leading eventually to his withdrawal from consideration for the top cop position at DOL.
In comparison, President Trump’s replacement nominee, R. Alexander Acosta, sailed through the Labor Secretary nomination process with relative ease. The former member of the National Labor Relations Board was seen as having a deeper connection to and understanding of the issues he would be facing as leader of the DOL. Acosta was then serving as Dean of the Florida International University Law School, and the Trump administration was careful to highlight his long and distinguished career in public service.
If and when the Republican majority in the Senate approves Rutledge’s nomination to head EBSA, the industry will begin eagerly watching how Acosta and Rutledge will work together on a variety of issues—chief among them the fiduciary rule reforms. Until Rutledge takes the position it remains difficult to forecast what the ultimate fate of the twice-delayed rulemaking might be; however, his time working closely with Senator Hatch offers some indication of what his broad philosophy is likely to be with respect to the labor issues of the day. With Hatch helping to lead the way, the Senate has recently voted to overturn Department of Labor (DOL) rules that helped state and local governments set up retirement savings plans for private-sector workers who have no access to such plans.
This move came despite strong opposition from retirement investor advocacy organizations—those representing individual investment product customers, rather than providers, it should be stated. AARP, for example, said its leaders were deeply disappointed with the Senate vote discouraging local flexibility to offer workplace savings for the 55 million Americans who currently lack access to retirement savings plans at work.
Such criticism notwithstanding, Rutledge seems to be enjoying relatively little opposition as he moves closer to becoming EBSA head, and a number of provider groups have today already applauded the Senate committee’s evening vote to advance his nomination. Lee Covington, senior vice president and general counsel for the Insured Retirement Institute (IRI), says his organization, which is actively lobbying for the reversal of the ongoing fiduciary rule reforms, is “looking forward to working with Preston to develop and put in place policies which will help to expand access to workplace retirement plans, increase retirement savings, and boost the utilization of lifetime income products.”