Labor Department sends new fiduciary rule to OMB

The Department of Labor sent its new and controversial fiduciary rule to the Office of Management and Budget late Friday afternoon.

The move is the first step to publishing the rule so it is in place well in advance of the November election. OMB has 90 days to review the rule.

OMB reviews rules considered “significant” under criteria established by executive order. Rules designated as significant require additional interagency reviews and an assessment of the rule's costs and benefits. The rule contents will not be known until OMB completes its review.

"IRI is dismayed that the Administration has decided to move forward with its fiduciary investment advice rule despite the evidence presented to DOL about the significant, unnecessary harm this rule will cause to retirement savers and concerns raised by members of Congress from both sides of the aisle," said Wayne Chopus, president of the Insured Retirement Institute, in a Saturday statement.

Since the rule was made public on Halloween, the DOL moved quickly to get a public comment period and a public hearing wrapped up within 60 days, working around several major holidays. Compared to previous fiduciary proposals, it was significantly condensed. A comment period closed Jan. 2 with more than 19,000 comments received.

The latest effort is the fourth attempt by the DOL to establish a fiduciary standard for virtually all rollover transactions involving retirement plans. Industry lobbyists say the rule will hurt middle market Americans by limiting their access to advice. Rule supporters say a tougher standard is needed to protect retirement savers.

Industry analysts expected a final fiduciary rule to be published by late winter or early spring, which would enable the Biden administration to publish the rule well in advance of the election. Industry lawsuits are expected to follow, challenging the DOL's authority to regulation individual retirement plans.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.