Ken Bentsen, Executive Vice President for Public Policy and Advocacy at SIFMA, spoke on behalf of the organization to the panel of regulators from the Employee Benefits Security Administration (EBSA).
SIFMA believes (in accordance with several previous presentations), that the new definition of a fiduciary is much too broad and seeks to impose fiduciary status on those who have no direct understanding of the plan.
SIFMA’s statements also challenged the reasoning presented by the DoL as to how the new definition would support increased enforcement of the laws. In his testimony, Bentsen said: “The Department also states that participants and beneficiaries would directly benefit from the Department’s more efficient allocation of enforcement resources by providing greater protections than are available under the current regulation. However, no example or explanation of this benefit is provided that would justify these sweeping changes. We believe there is no evidence that the proposed regulation will be more protective but a great deal of evidence that these “protected” accounts will suffer greater costs and fewer choices.”
He continued: “This proposed rule would reverse 35 years of case law, enforcement policy and the understanding of plans and plan service providers, without any legislative direction to depart from the Department’s contemporaneous understanding of the statute, in order to make it easier for the Department to sue service providers. That seems to us to be an inadequate basis for proposing such a dramatic change. And of course, this enforcement rationale cannot apply to IRAs, over which the Department has no enforcement authority.”
SIFMA’s complete statement can be seen here.