While most of labor secretary nominee Julie Su’s Senate confirmation hearing on Thursday focused on issues such as employee classification, apprenticeships and child labor breaches, she also fielded questions on SECURE 2.0 and the department’s work on a new fiduciary rule.
Ms. Su, currently the deputy secretary of labor whom President Joe Biden nominated to the department’s top job in March, would replace Marty Walsh, who left the post last month to work as executive director of the NHL Players’ Association, which represents professional hockey players in Canada and the U.S.
On SECURE 2.0, Sen. Patty Murray, D-Wash., a member of the Senate Health, Education, Labor and Pensions Committee, asked about the Labor Department’s implementation of some of the law’s key provisions, including establishing a lost-and-found database for retirement savers who have lost track of their 401(k) or pension plan.
Ms. Su, who previously served as the secretary of the California Labor and Workforce Development Agency, said the database will be important to help people maintain their retirement assets and noted that the Labor Department’s Employee Benefits Security Administration launched a similar program that’s smaller in scope in 2017 that has recovered about $6 billion. “SECURE 2.0 is going to let us do that for all retirees, and we look forward to working with you to make sure that becomes real,” Ms. Su said.
Later in the hearing, Sen. Ted Budd, R-N.C., asked Ms. Su about an item on the department’s rule-making agenda that could broaden who’s considered a fiduciary under ERISA by amending the regulatory definition of the term fiduciary. Mr. Budd brought up the 2016 fiduciary rule, which was finalized under the Obama administration and broadened the definition of a person or entity taking on fiduciary responsibilities.
In 2018, a three-judge panel at the 5th U.S. Circuit Court of Appeals in New Orleans vacated the rule in a 2-1 decision, saying the department exceeded its legal authority.
Mr. Budd criticized the 2016 rule and said he has “serious concerns with the DOL reimplementing a failed standard, not to mention the potential mismatch in industry standards that might arise between it and the SEC’s Regulation Best Interest,” or Reg BI.
Reg BI is an SEC rule package that took effect in 2020 that was designed to address the obligations of broker-dealers and investment advisers when they provide recommendations or investment advice to retail investors, including rollover recommendations.
Ms. Su, who wasn’t at the Labor Department in 2016, didn’t get into specifics about what the agency is working on now, but she said Mr. Budd’s point “is precisely why it’s so important for us to engage with all stakeholders before adopting any rule.”
The HELP Committee will vote on Ms. Su’s nomination April 26. If her nomination is voted out of the Democratic-run committee, it will head to the full Senate. No Republicans supported her confirmation as deputy labor secretary in 2021 and none are expected to do so this time, which means the vote will be narrow.
