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Labor secretary nominee Alexander Acosta wouldn’t commit to supporting the DOL’s fiduciary rule when under fire from Sen. Elizabeth Warren (D-Mass.) during his confirmation hearing March 22.
Warren, who has been a big proponent of the rule, asked Acosta if he “generally supports” the rule, which requires financial advisers to act in their clients’ best interest. In response, Acosta cited the “executive action” from President Donald Trump asking the Department of Labor to review and possibly revise or rescind the rule. Perhaps tipping his hand a bit, he added that the rule goes “far beyond” addressing the standard of conduct for financial advisers.
The Trump administration proposed a delay of the rule’s April 10 applicability date by 60 days, to June 9. Its decision to seek the delay was made in order to comply with Trump’s presidential directive to review the rule.
When pressed further by Warren for his opinion on the controversial rule, Acosta deferred to the directive from the Trump administration on the rule, saying that if he is confirmed, he will follow executive orders of the president.
Warren ended her questioning by charging Acosta with dodging her questions, and she lamented that he couldn’t commit to supporting the fiduciary rule.
Earlier in the hearing, Sen. Al Franken (D-Minn.) questioned Acosta about the Pension Benefit Guaranty Corporation. If confirmed, Acosta would become chair of the agency that backstops America’s pensions.
Franken asked Acosta about the status of the PBGC’s multiemployer pension fund and the pensions of the 400,000-member Central States, Southeast and Southwest Areas Pension Fund. The PBGC’s multiemployer fund is in dire straits and may run out of funds as early as 2025. The Central States fund faces insolvency, and its application to suspend benefits in an effort to save the plan was rejected by the Treasury Department last year.
“That means one of the largest pension crises in American history could land on your desk,” Franken said. The senator asked Acosta if he had a plan to help the PBGC’s fund or stop the Central States pension fund from going insolvent.
Acosta said doesn’t have a plan for either and hasn’t seen a plan to save the PBGC’s multiemployer fund “that has worked in the past decade.”
He also wouldn’t commit to ensuring that retirees won’t have their benefits cut from the level they are currently receiving--something Acosta said comes with a "$60 billion price tag.”
“This is a fundamental issue that we’ve got to think about and it’s not just the executive branch, but the executive branch working with Congress,” Acosta said.
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