It is time for the Department of Labor to once again involve itself in court cases concerning retirement plan issues.
As reported by Pensions & Investments in its Oct. 15 issue, the DOL has filed no amicus briefs in court cases over plan management issues, investment choices, fees and other defined contribution plan practices. During the Obama administration, the DOL filed many friend-of-the-court briefs.
Friend-of-the-court briefs can help judges understand the wider context of cases before them. Industry groups representing plan sponsors and service providers file many such briefs in the courts in cases involving retirement plans. The DOL can provide the courts with insight from the beneficiaries' point of view.
However, the DOL should not use amicus briefs to regulate without doing the hard work of drafting a regulation, seeking comment from the industry and others, revising it when necessary, and issuing a final version. Some in the industry suspect that's exactly what the Obama DOL was doing.
According to Phyllis Borzi, former assistant secretary of labor for the Employee Benefits Security Administration, the DOL during the Obama administration used amicus briefs "to clarify ambiguities in the statute and move statutory interpretation forward."
The DOL has an obligation to intervene on behalf of beneficiaries when department officials feel the courts are likely to hear only one side — the sponsor's or vendor's side — from the amicus briefs filed by industry organizations.
But it should not use such briefs as a shortcut to regulation.
