Manchin leads effort to overturn new retirement investment advice rule

West Virginia Sen. Joe Manchin, a Democrat, and a group of Republican senators on Wednesday are seeking to overturn a new retirement investment rule that was approved by the Labor Department last month.

The rule would establish an updated definition of an investment advice fiduciary under the Employee Retirement Income Security Act, and would help cut down on conflicts of interest, by instructing the fiduciaries to avoid giving advice  “that favor the investment advice providers’ interests — financial or otherwise — at the retirement savers’ expense,” the Labor Department said, per the Hill.

Manchin slammed the new rule for being too broad, and accused the federal government of overreaching. 

“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 in a statement. “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."

A group of 15 GOP senators have joined Manchin's attempt to overturn the rule, including Sen. Ted Budd from North Carolina. Rep. Rick Allen, a Georgia conservative, introduced a companion bill in the House of Representatives.

“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,” Allen said in a statement.

The Labor Department said the current definition of an investment advice fiduciary was written in the 1970s, before 401ks were created, and back when individual retirement accounts were rare. 

“These new rules update regulations created nearly a half-century ago that simply are not providing the protections America’s workers need and deserve for their retirement savings so that they can retire with dignity,” Assistant Secretary for Employee Benefits Security Lisa Gomez said in a statement. “The investment landscape has changed, the retirement landscape has changed, and it is critical that our regulations are responsive to those changes so that workers can reach the secure retirement that they work for decades to finally achieve.”

If the rule is not overturned, it will go into effect on Sept. 23, 2024.