Legislation Introduced That Would Reverse Retirement Security Rule
The Congressional Review Act resolution is unlikely to survive a presidential veto.
Members of the House and Senate introduced companion bills under the Congressional Review Act that would nullify the Department of Labor’s Retirement Security Rule.
The rule was finalized in April and would subject one-time transactions such as annuity sales and rollovers to fiduciary obligations under the Employee Retirement Income Security Act.
The CRA bills would render the rule with “no force or effect,” if passed. It is sponsored by Senators Ted Budd, R-North Carolina, Bill Cassidy, R-Louisiana, and Roger Marshall, R-Kansas; and Joe Manchin, D-West Virginia, in the Senate. The House version is sponsored by Representatives Rick Allen, R-Georgia and Education and the Workforce Committee Chairwoman Virginia Foxx, R-North Carolina.
A joint statement from the bills’ sponsors says the rule “threatens to gut a wide range of financial tools that many of the largest financial planning and wealth management firms currently offer consumers, including basic financial education and investment planning courses, life insurance, annuity plans, and other financial instruments.”
The final rule specifically and explicitly clarifies that educational and related communications are not covered by its provisions.
It states: “The mere provision of investment information or education, without an investment recommendation, is not advice within the meaning of the rule.”
If the bill were to pass the Republican-controlled House and Democrat-controlled Senate, it is all but certain to be vetoed by President Joe Biden.
The legislation has been endorsed by the Insured Retirement Institute and American Securities Association.