ARA CEO Brian Graff to Testify at Fiduciary Rule Hearing

American Retirement Association (ARA) CEO Brian Graff is scheduled to testify on the first day of a public hearing hosted by the Department of Labor (DOL) titled “Retirement Security Rule: Definition of an Investment Advice Fiduciary.”

Graff will follow opening remarks from Assistant Secretary for the Employee Benefits Security Administration (EBSA) Lisa Gomez on Tuesday morning, December 12, at 9:15.

He will be joined by the American Benefits Council’s Lynn Dudley, University of Michigan Professor Dana Muir, and the Securities Industry and Financial Markets Association’s (SIFMA) Lisa Bleier on the day’s first panel.

The virtual public hearing will take place December 12 through December 13, 2023, continuing (if necessary) on December 14, 2023, for the public to provide input on the Department’s proposed Retirement Security Rule: Definition of an Investment Advice Fiduciary, proposed amendments to Prohibited Transaction Exemption (PTE) 2020–02, proposed amendments to PTE 84–24, and proposed amendments to several other existing administrative PTEs that are available to investment advice fiduciaries.

EBSA said it welcomes requests from the public to testify at the hearing.

As EBSA noted, if adopted as proposed, the rule would amend the Department’s current regulation that defines who is a “fiduciary” of an employee benefit plan for purposes of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) as a result of providing investment advice to a plan or its participants or beneficiaries for a fee or other compensation, direct or indirect.

The proposed rule also would amend a parallel regulation defining who is a “fiduciary” of a plan described in Internal Revenue Code section 4975, including an individual retirement account, for purposes of Title II of ERISA.

Plan Level Advice

One critically important issue is that the SEC’s Regulation Best Interest (Reg BI) currently does not extend to recommendations to plan sponsors.

While larger plan sponsors generally have access to the expertise and support of professional retirement plan advisors, an advisor who sells a small employer a 401(k) and has no further action (one-time interaction) with the plan or its participants is not, until this point, required to provide investment advice protection under ERISA’s five-part test.  

With the provisions of the SECURE 2.0 Act of 2022 expected to expand the number of new plans significantly, particularly those offered by small businesses, this “gap” could have left millions of employers and their workers at risk. The gap in regulatory coverage would close under the proposed rule.

CLICK HERE TO REGISTER TO ATTEND THE VIRTUAL HEARING.

(Note: Separate registration is required to attend separate days.)