September 9, 2015

The Honorable Thomas E. Perez

Secretary

U.S. Department of Labor

200 Constitution Ave., NW

Washington, D.C. 20210

Re: Definition of the Term “Fiduciary”; Conflict of Interest Rule—Retirement Investment 

Advice

Dear Secretary Perez:

As California State Treasurer, I support the efforts by the Department of Labor 

(Department) to update the definition of “fiduciary” to apply to a wider array of advice 

relationships than existing regulations. I believe strong consumer protections and greater 

transparency in consumer finance are vital to the economic security of all Californians. In my 

tenure as both Treasurer and Controller of the State of California, I have long been devoted to 

ensuring all Californians have access to the financial tools they need to achieve financial security 

and that they can access to the information they need to make sound financial decisions. 

The concept behind the proposed rule and exemptions would appear to bolster consumer 

protections for retirement plan participants by ensuring financial professionals who provide 

retirement advice and products to act in their clients’ best interest. The application of the rule to 

include Individual Retirement Accounts (IRAs) would help to protect the millions of IRA 

investors from harmful conflicts of interest that could cost IRA investors billions of dollars over 

the next 20 years. 

Retirement insecurity is not unique to California. Nationwide, about half of households 

age 55 or older have no retirement savings and have few other resources to draw on in 

retirement. Though Social Security is vital to the financial security of Americans, its benefits 

alone are not enough to sustain them in retirement.

I believe the proposed fiduciary rule will improve retirement security by holding 

fiduciaries accountable for their actions and assuring they perform their duties to the highest 

ethical standards. I support the Department’s efforts to “safeguard plan participants by imposing 
The Honorable Thomas E. Perez

September 9, 2015

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trust law standards of care and undivided loyalty on plan fiduciaries, and by holding fiduciaries 

accountable when they breach those obligations.” Furthermore, I support increased transparency 

efforts beyond the requirements of the Proposed Rule and appreciate the Department’s efforts to 

address conflicts of interest in the rollover of plan assets, one of the most significant financial 

decisions participants can make concerning retirement savings.

All Californians should have the means to pursue financial security in retirement. As 

Chair of the California Secure Choice Retirement Savings Investment Board, I am committed to 

expanding retirement plan coverage to all Californians and to ensure the California Secure 

Choice Retirement Savings Program provides secure and convenient retirement savings. The 

Department’s dedication in this endeavor is evident in its effort to both address harmful conflicts 

of interest among retirement plan providers and expand coverage to secure retirement savings 

plans by crafting regulations that clarify how state initiatives like ours can comply with federal 

law. Together, these regulations can bolster the economic security of millions of Americans by 

assuring they have access to safe, secure retirement savings plans free from harmful conflicts of 

interest.

Thank you for the opportunity to provide comments and I commend your efforts to 

increase transparency, protect the integrity of retirement benefits, and provide opportunities to 

increase retirement security for all Americans.

Sincerely, 

Original signed by

JOHN CHIANG

California State Treasurer