Sen. Joe Manchin (D-W.Va.) and a group of Republican senators are moving to overturn a retirement investment planning rule that was finalized by the Labor Department last month.
The Labor Department unveiled the new rule last month that would update the definition of an investment advice fiduciary under the Employee Retirement Income Security Act. Manchin and 15 Republican senators joined in co-sponsoring a Congressional Review Act (CRA) resolution that would overturn this new rule.
Manchin argued that the rule, if enacted, would cause people to “lose access to investment advice due to how broadly the rule defines fiduciary.”
“This Department of Labor rule is yet another example of dangerous federal overreach. While I understand the Administration’s intent to protect Americans’ retirement savings, the truth of the matter is this does the exact opposite,” Manchin said.
The Labor Department said the rule will require “trusted investment advice providers to give prudent, loyal, honest advice free from overcharges.”
Under the new rule, these fiduciaries need to avoid giving recommendations “that favor the investment advice providers’ interests — financial or otherwise — at the retirement savers’ expense,” according to the department.
“Hardworking West Virginians and Americans need protection, not uncertainty when it comes to their long-term financial security, and they certainly do not want or need the federal government further involved in their personal retirement decisions,” Manchin said.
Sen. Ted Budd (N.C.), one of the Republicans who introduced the CRA resolution, described the rule as the “Biden administration’s latest executive overreach” in a statement.
“Consumers would lose access to financial advice, reduce the number of financial management options, and throw a would-be retiree’s financial security into uncertainty,” he said. “That’s why I am proud to lead the Senate’s bipartisan CRA to overturn this dangerous new regulation, and look forward to it receiving a vote on the floor.”
Rep. Rick Allen (R-Ga.) also led the companion bill for this legislation in the House and took aim at the Labor Department’s new rule in a statement.
“By muddying the waters with burdensome overregulation, the Biden [Labor Department’s] finalized fiduciary rule does more harm than good to the very people it is claiming to protect — retirees and savers,” he said.
The Hill has reached out to the Labor Department for comment.