Public Comments | Fiduciary rule

EPI comment on the proposed 18 month delay of key provisions of the fiduciary rule

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Office of Exemption Determinations

Attention: D-11712, 11713, 11850
U.S. Department of Labor
200 Constitution Avenue NW, Suite 400
Washington, D.C. 20210

RE: RIN 1210-AB82

Submitted via:

To the Department of Labor:

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. We respectfully submit the following comment in response to the Employee Benefits Security Administration’s Notice of proposed amendments to PTE 2016-01, PTE 2016-02, and PTE 84-24.

We strongly oppose any further delay in the full implementation and enforcement of the fiduciary rule. In particular, we object to any delay in the January 1, 2018, applicability date of the provisions in the BIC Exemption (PTE 2016-01), Principal Transactions Exemptions (PTE 2016-02), and amendments to PTE 84-24. People who have worked hard to save for retirement need and deserve all of the provisions of the fiduciary rule to be fully implemented and enforced.

The rule has already been delayed. In the second week of his presidency, President Trump directed the department to prepare an analysis concerning the likely impact of the rule—despite the fact that the department had just completed a roughly six-year exhaustive vetting process that produced a nearly 400-page economic analysis on the likely impact of the rule which incorporated feedback from four days of hearings, more than 100 stakeholder meetings, and thousands of public comments. As a result, the entire rule was delayed by 60 days—a delay that we estimate will end up costing retirement savers $3.7 billion over the next 30 years. (Note that if there is a delay, losses to retirement investors persist and compound long after the delay ends. The department itself has noted that as a result of a delay, the losses to retirement investors would “continue to accrue until affected investors withdraw affected funds or reinvest them pursuant to new recommendations“ and that losses up to that point “would not be recovered, and would continue to compound, as the accumulated losses would have reduced the asset base that is available later for reinvestment or spending.”)

Following the 60-day delay, portions of the rule went into effect on June 9, 2017. However, key enforcement provisions were further delayed until January 1, 2018. We estimate the cost to retirement savers of this further nearly seven-month delay of key provisions of the rule will be between $2.0 billion and $5.9 billion dollars over the next 30 years, with a middle estimate of $3.9 billion (please see the attached detailed methodology underlying our estimate).

And now, the department is considering a further delay of 18 months of these valuable provisions. We estimate the cost to retirement savers of an additional 18 month delay to be between $5.5 and $16.3 billion dollars over the next 30 years, with a middle estimate of $10.9 billion. Given the large, persistent losses suffered by retirement investors as a result of a further delay of these provisions, we oppose any delay of the full implementation and enforcement of the rule.

Retirement investors need and deserve to receive the protections of the full fiduciary rule. The department should conclude that the fiduciary rule should become fully applicable on January 1, 2018, as currently scheduled.

Heidi Shierholz
Senior Economist and Director of Policy at the Economic Policy Institute

Addendum: Methodology for estimating losses to retirement investors of partial implementation of fiduciary rule 

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