May 8, 2015
The Honorable Thomas E. Perez
Secretary
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Re:
The Department of Labor’s Fiduciary Duty Rule and Requests to Extend the Comment
Period
Dear Secretary Perez:
We urge you to resist requests to extend the comment period for the Department of Labor’s
(DOL) proposed fiduciary duty rule and continue the rulemaking process as scheduled. There is no
justification for further delay in the effort to close the loopholes in the DOL’s outdated rules that are
costing American workers and retirees tens of billions of dollars annually. Every American expects
and deserves retirement investment advice that is in their best interest, and that is simply and
fundamentally what the DOL is seeking to ensure.
The undersigned organizations are working together in support of the fiduciary duty
rulemaking effort. We firmly believe in the DOL’s commitment to strengthen protections for
retirement savers and appreciate your leadership in moving forward on this much-needed regulatory
update.
The DOL has given stakeholders ample time—75 days—to review and comment on its
proposed rule. This period is already longer than the 60 days considered appropriate under Executive
Order 12866, and more than twice as long as the minimum 30 day period set forth in the
Administrative Procedures Act. Moreover, once this initial comment period is over, the DOL is
planning to conduct a public hearing and then allow yet additional time for public comment. Each of
these steps follows years of extensive outreach and consultation by the DOL with all stakeholders—
supporters and opponents alike—while the DOL was evaluating the need for an updated rule and
crafting a proposal. The industry’s request for an extension also strains credibility, since they have
massive resources and expertise at their disposal and can undoubtedly analyze the proposed rule and
prepare their comments well within the 75-day comment period.
Extending the comment period will prove doubly harmful, as it will cause more hardship for
American workers and retirees while facilitating efforts by opponents of the rule to prevent it from
being finalized during the Obama Administration. Every single day that passes without a strong
fiduciary duty rule means between $57 million and $117 million of retirement savers’ hard-earned
money is lost to conflicted investment advice, amounting to at least $21 billion annually. These are
real financial hardships and they militate against any further delay in the rulemaking process.
The Honorable Thomas E. Perez
Page 2
The current rule enables advisers to steer retirement savers into investment products that carry
high costs, deliver low returns, and sometimes cause devastating losses, all in exchange for lucrative
commissions. Too many advisers take advantage of the loopholes, and these conflicts of interest
prove especially harmful for low- and middle-income workers and retirees who can least afford to
see their retirement income siphoned away purely for their adviser’s personal financial gain.
Further, the fiduciary duty rule has not been updated since it was first promulgated in 1975.
Forty years later, the retirement landscape looks dramatically different. Traditional pension plans
have been dwarfed by defined contribution plans and individual retirement accounts (IRAs), which
require everyone to make complex decisions about managing their own retirement assets. Thus,
Americans now must rely on the expertise and loyalty of investment advisers to make the most of
their savings.
The proposed rule can help stop the ongoing abuses, and bring the rule into alignment with
the modern retirement landscape, all without restricting the supply of financial education or
affordable, individualized advice.
We are using the 75-day comment period to carefully evaluate and comment on the proposed
rule. We hope you will resist any efforts to delay this long overdue rulemaking effort so workers
and retirees can begin keeping more of their hard-earned savings in their own pockets and live a
dignified retirement.
Sincerely,
Nancy A. LeaMond
Executive Vice President
Community, State & National Affairs
AARP
William Samuel
Director, Government Affairs Department
AFL-CIO
Scott Frey
Director of Federal Government Affairs
AFSCME
Lisa Donner
Executive Director
Americans for Financial Reform
Dennis Kelleher
President & CEO
Better Markets
Barbara Roper
Director of Investor Protection
Consumer Federation of America
Karen Friedman
Executive Vice President and Policy Director
Pension Rights Center
CC:
President Barack Obama
Phyllis Borzi, Assistant Secretary for Employee Benefits Security, Department of Labor
Members of Congress