July 20, 2015

Office of Regulations and Interpretations

Employee Benefits Security Administration

ATTN: Conflict of Interest Rule, Room N-5655

U.S. Department of Labor

200 Constitution Avenue NW

Washington DC 20210

RE: RIN 1210-AB32

Proposed Department of Labor Rule on Definition of the Term 

“Fiduciary”; Conflict of Interest Rule – Retirement Investment Advice

To Whom It May Concern:

These comments are submitted in response to the proposed regulatory 

changes to defining who is a “fiduciary” of an employee benefit plan 

under the Employee Retirement Income Security Act of 1974 (ERISA), as 

well as who is a “fiduciary” of a plan (including an individual retirement 

account (IRA)) under section 4975 of the Internal Revenue Code of 

1986, as a result of giving investment advice to a plan or its participants 

or beneficiaries.

Retirement security for all is a priority for the Service Employees 

International Union (SEIU). We represent two million workers and 

advocate to improve their lives and the lives of all workers. SEIU is the 

largest healthcare union with more than 1.1 million members including 

licensed and registered nurses, doctors, lab technicians and nursing 

home and homecare workers. As the largest property services union, 

SEIU represents 225,000 workers in the building cleaning and security 

industries, including janitors, security officers, superintendents, 

maintenance workers, window cleaners and doormen and women. 

With more than one million state and local government workers, public 

school employees, bus drivers, child care providers and university 

professors, SEIU is the second largest public service union.

A secure retirement is critical to our members and their neighbors. 
We support the proposed regulation that defines “fiduciary” under the Employee Retirement 

Income Security Act.

The current regulations have been in place since 1975. In that time substantial changes have 

occurred in the retirement security marketplace. Notably, defined benefit pensions are less 

common, and many individuals solely bear the responsibility of saving for a secure retirement 

through self-directed IRAs and 401(k)s. These individual plans often require complex financial 

decisions, and many individuals use financial professionals for advice. 

Loopholes in the existing regulations leave individuals vulnerable to advisors who do not act in 

the best interests of the clients. Last year alone, unnecessary risks and bad investment advice 

cost Americans as much as $17 billion. Given the shifts that have occurred in the last 40 years 

since the current fiduciary rules were put in place it is critical that the Department of Labor 

(Department) update the rules to protect individual savers.

We offer comments on two provisions in the proposed rule:

 We support the Department’s decision to extend fiduciary status to advisors who give 

advice on a one-time basis;

 We support the Department’s decision to extend fiduciary status to advisors even if 

such advice is not the “primary basis” for investment decisions.

Forty years ago the Department issued regulations to clarify who is a fiduciary under ERISA. 

That 1975 regulation provided that an advisor is a fiduciary if the advice is:

 Rendered on a “regular basis”

 Rendered for a fee, direct or indirect

 Provided pursuant to a mutual agreement, arrangement, or understanding

 Individualized to the plan’s particular needs; and

 A “primary basis” for the investment decision.

In general, each of the standards must be met before an advisor is considered a fiduciary. This 

severely limits ERISA’s fiduciary protections and leaves individuals vulnerable to bad actors.

We strongly support the elimination of the “regular basis” and “primary basis” conditions 

from the determination of whether an adviser meets fiduciary status.

Individuals do not always seek advice on an ongoing or regular basis. The importance, and 

potential consequence, of investment advice is not diminished if it is given on a one-time basis. 
Advisers must always be held to a standard that requires them to act in the interest of their 

clients when giving advice.

Similarly, clients must be able to trust the advice that is given. Clients should be able to rely on 

the advice without regard to whether it is viewed as a primary basis or a lesser basis in the 

decision making. 

Financial advisors should be working in the best interest of their clients. It is past time to close 

the loopholes in the definition of “fiduciary” that allows financial professionals to direct clients 

to investments that are not in the clients best interests. Millions of Americans who are saving 

for retirement deserve the protections that will follow once advisers are required to act with 

the highest standards.

Sincerely,

Peter Colavito

Director of Government Relations

Service Employees International Union