The DOL and other groups might have the time and capacity to pick up work on retirement income strategies, now that a U.S. appellate court decision has vacated the fiduciary rule, industry experts said at Pensions & Investments' East Coast Defined Contribution Conference in Miami March 18-20.
In a keynote address on retirement legislation and policies, Michael P. Kreps, a principal at Groom Law Group, said he was doubtful that the Department of Labor would appeal a March 15 federal appeals court decision that vacated the fiduciary rule.
"It seems unlikely" that a department that has officials who have been skeptical of the rule since the beginning, and received a 2017 memorandum from President Donald Trump to analyze the rule's impact, would defend the rule "when they have a clear decision that undoes it all," Mr. Kreps said.
Potentially free from having to focus their time on the fiduciary rule, Department of Labor regulars might turn their attention to other issues, like lifetime income, instead, Mr. Kreps said.
Retirement income solutions already are receiving some attention from Congress, Mr. Kreps noted. Legislators have been working on a bipartisan retirement savings package that would facilitate the use of lifetime income strategies in DC plans, among other provisions.
Regardless of what happens to the fiduciary rule, it has "forced" a lot of plan executives and asset managers to think about strategies to help participants draw down their assets in retirement, said Nick Nefouse, managing director, head of DC investment and product strategy at BlackRock Inc., and co-head of the firm's Lifepath target-date series. There is recognition that if people do stay in plans, "the fiduciary responsibility of the plan sponsor would increase," Mr. Nefouse said, speaking on a panel on retirement readiness.
"From a fiduciary perspective, we are hearing from some plan sponsors who feel like if it's one (participant), if it's 100, if it's 1,000, they have exposure to folks who are staying in the plan and are going to need investment options and solutions that make sense for them," added Sue Walton, senior vice president and senior defined contribution strategist at American Funds from Capital Group.