In the article, “All eyes on DOL plan to revisit fiduciary rule,” Pensions & Investments reported that a recent Department of Labor (DOL) proposal could broaden who is considered a fiduciary under ERISA. The publication turned to benefits and executive compensation partner Fred Reish for insight on the potential changes.
Reish explained that there’s a concern for people who move to a retail IRA, where there isn’t a fiduciary standard. “I think there’s concern in the department and in general that people go from retirement plans to IRAs – a retail environment where there are higher costs, less protections from conflicts of interest and there isn’t a fiduciary standard,” said Reish. “It’s not so much about a person 30 years old leaving their job and putting money in an IRA; this is really about baby boomers retiring in a defined contribution world.”
The article also mentioned that stakeholders are watching to see how the Securities and Exchange Commission (SEC) enforces its best-interest standard (Reg BI). Reish shared that, because the rule doesn’t have specific definitions of terms like “best interest” and “conflicts of interest,” the SEC’s interpretation will be what’s enforced. He added that a Democratic-led SEC is likely to focus more on the cost differentials investors pay and the different commission incentives financial professionals receive for giving advice than a Republican-led SEC would have.