While the effects of Covid-19 continue to take a toll on the economy, the Department of Labor is taking constructive steps to offset the impact. On June 3 the Department’s Employee Benefits Security Administration (EBSA) issued an Information Letter that essentially blessed the use of private equity investments as investment options in Employee Retirement Income Security Act of 1974 (ERISA) plans, subject to certain conditions.
Many on Capitol Hill watch are expecting the action in 2018 to shift to regulators at the Department of Labor, the SEC and the Treasury Department, which oversees the Financial Stability Oversight Council.
"The real play is going to be on the new people coming into the agencies," including the SEC, which has its first full commission since 2015, said Paul Atkins, CEO of Patomak Global Partners, a Washington financial services consultancy. Mr. Atkins, a former SEC commissioner, is optimistic the agency will address market structure issues that should be less partisan. "What's good for investors should be good for markets," he said. On the enforcement side, he expects SEC officials to press for more personal accountability of officials whose companies are prosecuted for investor fraud.
However, as my new white paper shows, the Labor Department’s projections were based on incorrect interpretations of academic research.
By Paul Atkins
This week, the U.S. Department of Labor’s highly controversial fiduciary rule — crafted during the Obama administration — is slated to go into effect. Fortunately, it is not too late for Labor Secretary Alexander Acosta to take decisive corrective action in light of recently changed circumstances to put the entire flawed rule on hold, but time is running out.
As part of our Kurtosys Insights series, we caught up with Dan to get his views on the effects of the DOL’s Fiduciary ruling, a potential Trump presidency, the UK’s “Brexit” and Blockchain technology.
For the past five years, the Department of Labor (DOL) has pushed to expand the definition of “fiduciary” under ERISA, the 1975 law governing pension plans, to include all financial professionals who provide investment advice to sponsors of and investors in IRAs, including brokers who are paid commissions. This decision could lead to higher fees for investors, and decrease their choice of investment products and competition for their business.