FSI Submits Comments on DOL’s Retirement Security Rule Proposal 

January 2, 2024

Warns DOL’s Proposed Rule, will negatively impact Main Street investors saving for retirement 

WASHINGTON, D.C. – The Financial Services Institute (FSI) submitted a comment letter on the Department of Labor’s (DOL) Retirement Security Rule Proposal. The comment letter highlights concern that the Proposed Rule would have a negative impact on Main Street Americans’ access to financial advice as they save for retirement. The organization also noted that, despite the Department’s claims to the contrary, the rule is a repackaging of the deeply flawed 2016 fiduciary rule. FSI is asking the DOL to withdraw the proposal.  

Click here to read the comment letter.

Below is a message from FSI President & CEO Dale Brown:  

“We appreciate the opportunity to comment on the Proposed Rule and provide insights into how this rule would impact our members and their clients. FSI has long supported workable best interests standards that protect investors without limiting their access to the advice, products, and services they need to achieve their financial goals. The U.S. Securities and Exchange Commission’s (SEC) Regulation Best Interest (Reg BI) and DOL’s existing PTE 2020-02 set best interest standards that achieved the right balance. However, the Proposed Rule would only layer on unnecessary and costly requirements, limiting access by the Main Street Americans our members serve.” 

The comment letter highlights several key points and issues, including:  

  • The Proposed Rule is inconsistent with the Employee Retirement Income Security Act of 1974 (ERISA).  
    • The proposal tampers with the ERISA regulatory scheme, and extends ERISA benefits and remedies, in multiple ways not specifically authorized by statute and that exceed DOL’s authority. 
  • The DOL is not the appropriate “standard of conduct” regulator for the financial services industry; that responsibility falls under the SEC’s jurisdiction. 
    • The SEC has already provided a “best interest standard” for investors under Reg BI, including when retirement account-related rollovers are recommended to investors.  
  • The Proposed Rule would create a more complicated and costly regulatory regime where:  
    • Retirement investors would be burdened with additional costs;  
    • Access to high-quality, personalized retirement advice would become limited, especially for clients with small account balances; and 
    • Investment and advisory choices would become limited, especially for clients with small account balances. 
  • The SEC’s Reg BI and the DOL’s existing PTE 2020-02 achieve the right balance, while the Proposed Rule would create unnecessary costs and requirements. 
  • The regulatory impact statement’s cost/benefit analysis lacks any empirical support and substantially underestimates the costs of the Proposed Rule.