Sen. Lamar Alexander (R-Tenn.) joined a group of Republican lawmakers on Tuesday in warning the Office of Management and Budget (OMB) against the Department of Labor’s (DOL) proposal to expand the term “fiduciary.”
President Barack Obama recently announced that the DOL would send a modified version of its fiduciary rule proposal to the OMB.
In a letter sent to OMB Director Shaun Donovan, the lawmakers said they were concerned that the proposal will be similar to the administration’s proposal from 2010, which was contentious and ineffective.
The 2010 proposal ultimately was withdrawn. It defined even a secretary working at an investment company as a “fiduciary” because the secretary passes out basic information, such as investment fact sheets, as part of his or her job.
The letter states that the 2010 rule would have reduced people’s access to affordable retirement planning advice, which would affect millions of American workers and families.
“[T]hirty-four percent of surveyed small businesses who offer retirement plans recently indicated that a re-proposed rule similar to the 2010 rule would make it at least somewhat likely that they would spend less money and time on employee education,” the senators wrote. “Moreover, a rule similar to the 2010 rule may bring an end to call centers and broker-dealer assistance that have customarily helped consumers understand what retirement savings options are available upon termination from a company. Eliminating this source of financial literacy has been estimated to increase annual retirement savings withdrawals by an additional $20 to $32 billion.”