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May 26, 2015

U.S. Department of Labor

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: Proposed Fiduciary Regulations (RIN 1210-AB32)
Dear Sir(s) and/or Madame(s):

I hereby comment with respect to the fiduciary definition regulations. I
believe the portion of the regulations stating that a recommendation that a
benefit be distributed or rolled over is a fiduciary act is unlawful because such
a thing does not fall within the plain English language meaning of “investment
advice.” The investment advice rule supplies the basis for inclusion.

Case law holds that any agency can only draw its authority from law
created by Congress. In Louisiana Public Service Comm. v. FCC, 476 U.S. 355,
374 (1986), the U.S. Supreme Court said: “[A]n agency literally has no power to
act unless and until Congress confers power on it.” See also City of Arlington
v. FCC, 133 S. Ct. 1863, 1869 (2013). Thorne v. Maggio, 765 F. 2d 1270, 1274
(St Cir. 1985), provides: “Whatever is not forbidden on our blessed shores is
permitted.” Numerous U.S. Supreme Court cases hold that a statute must
be interpreted using ordinary English language, with words and phrases taken
in proper context. Food & Drug Admin. v. Brown & Williamson Tobacco, 529
U.S. 120 (2000); MCI Telecommunications Corp. v. American Telephone,
Telegraph Co., 512 U.S. 218 (1994). The authority granted by ERISA §505,
which does not apply to Title 26 of the U.S. Code (including IRC §4975), does
not override these authorities. See Loving v. Internal Revenue Service, 742 F.
3d 1014 (D.C. Cir. 2014), wherein the U.S. Court of Appeals for the District of
Columbia struck down the IRS’s stretch of statutory language beyond its
ordinary English meaning.



Applying the foregoing authorities, it is unlawful to include the provision
of distribution or rollover advice in the definition of fiduciary. The issue is
significant because financial advisors, CPAs and attorneys often advise clients
regarding these matters without any thought of particular investments. For
example, many years ago, I advised a client regarding whether he should take a
distribution of company stock that he held in his employer’s retirement plan
(and receive beneficial tax treatment under IRC §402(e)(4)(B)) or roll the assets
over to an IRA (from which all distributions would be ordinary income). I did
not advise him with respect to alternative investments. Under the proposed
definition, I could not provide the advice without committing a prohibited
transaction, unless I took actions necessary for my advice to fall under the
BICE exemption. It would be very difficult to fall under the exemption.

As an attorney, I have a duty to act in the best interest of a client. For
the particular client mentioned above, that would mean giving him my
thoughts and recommendations, and not simply educating him on the
distribution and rollover options and implications. While I generally try to
educate my clients and let them make decisions, they often ask for a
recommendation. It is unlawful to put an attorney in a place such as I was in
with respect to my client in the position proposed. The provision is contrary to
the position taken in Adv. Op. 2005-23A. The fact that the existing regulations
do not extend power to the maximum extent lawful does not permit an
excessive interpretation at this time to “make up” for the past shortfall.

I understand the concern about people steering individuals to take
actions so that they can “get access” to their money, in terms of being able to
draw compensation by making investment recommendations, etc. following a
distribution or rollover. Perhaps making distribution recommendations or
rollover recommendations when the person making the recommendation will
draw compensation from the post-transaction assets when held in an IRA
could possibly fall within the definition. However, I’m certain that simply
making recommendations regarding taking a distribution or rolling over assets
does not constitute giving investment advice. The law is what it is, and cannot
be expanded beyond what it is for any reason.

Please change the rule to be consistent with the statute. Thank you.
Sincerely,

uw

Allen Buckley