04/01/2011 FRI 9:06 FAX

‘Twelfth District, New Jersey

1214 Longworth Building
‘Washington, D.C. 20515

RUSH HOLT

202-225-5801

Fax 202-225-6025
wi War NF 880 Congress of the United States
Fax 609-750-0618 March 30, 2011

hutp:/folt.house. gov

002/003

GHEY

Chair
Select Intelligence Oversight Panel
‘Committee on Appropriations

Committee on Education
and Labor

Permanent Select Committee
on Intelligence

Committee on Natural Resources

The Honorable Phyllis C. Borzi

Assistant Secretary 3

Employee Benefits Security Administration t
U.S. Department of Labor

200 Constitution Avenue, NW, Ste S-2524 =
Washington, D.C. 20210 -

Dear Assistant Secretary Borzi:

I wanted to thank you for taking the time to meet with me on March 10. I appreciated the
opportunity to learn your perspective on the proposed rule on the definition of “fiduciary”
and for considering my questions and concems. In addition, as a sponsor of the Lifetime
Income Disclosure Act, I appreciate your strong advocacy for this policy.

I value your and the Department’s efforts to produce an updated fiduciary standard that
has the employees’ best interests in mind. The update to the “regular basis” test, in
particular, is a welcome change that provides increased clarity to both advisers and
investors. In addition, I am encouraged by the SEC’s movement to a reasonable
disclosure-based regime for brokers and investment advisers offering products from
which they may receive financial benefit. I hope the Department takes similar,
reasonable actions in enhancing disclosures to plan sponsors and participants that do not;:
for example, force advisers to disclose that their interests are “adverse” to those of their
clients.

As we discussed, my interest with regard to the rule change stems from my general view
that the more sound, professional investment advice available to employees, the better.
This general principle should be central to any regulations that define what actions
constitute a “fiduciary.”

Tremain concemed that under the proposed rule service providers may be considered
fiduciaries in situations that will make it extremely difficult for them to provide important
educational information and investment tools to participants. I also am concemed that
should providers continue to offer investment education to participants, they may do so at
added costs that would likely be passed along to participants. Ultimately, either of these
scenarios may lead to less access to financial education and investment advice for
participants and less saving for retirement — an undesirable outcome for all interested
parties.

I share the concerns of various participants in EBSA’s public hearings with regard to the
proposed rule’s application to Individual Retirement Accounts (IRAs) — especially the
lack of cost analysis of the proposed changes. Specifically, I believe the application of

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04/01/2011 FRI 9:06 FAX (003/003

the rule to IRAs will constrain the ability of service providers who have strong
relationships with their clients to discuss appropriate options for their IRAs.

My concerns aside, I appreciate the Department’s openness to public comment, and I was
encouraged by your remarks’ during our meeting of the substantial interaction with the
SEC. I believe that meaningful collaboration with the SEC’s efforts on the substance and
timing of the final rule will benefit investors and advisers.

Thank you for your time and thoughtful consideration of my concerns. I look forward to
hearing from you with regard to the points that I raised. If I can be of any assistance to
you on this, lifetime income disclosure, or.any_other issues, do not hesitate to contact me.

Moet

RUSH HOLT
Member of Congress

Sincerely,

RH/ke


04/01/2011 FRI 9:06 FAX 001/003

Congressman Rush Holt
12" District, New Jersey
www.holt.house.gov
4214 Longworth House Office Building
Washington, DC 20515

(202) 225-5801
(202) 225-6025 (fax)

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From:
Congressman Rush Holt D Zach Goldberg
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