MAINE
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CHAMBER

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The voice of Maine business
September 22, 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 D.C. 20210

To whom it may concern:

The Maine State Chamber of Commerce is Maine’s largest statewide advocacy business
organization, representing a network of nearly 5,000 businesses across the state, from every
business sector, and comprised of both our state’s largest and smallest business. Collectively,
these businesses employ over 100,000 Maine residents and represent a nearly one-sixth of the
total number of people in our state’s workforce today. Recently it has come to our attention
that the U.S. Department of Labor has re-proposed a rule targeting the existing definition of
fiduciary Investment advice under the Employee Retirement Income Security Act of 1974
(ERISA). While we support establishing 2 -best-interest standard urider ERISA, the Maine State

Chamber wishes to go on record expressing-concerns with how the Department is séeking to
apply this revised standard. te A fig!

As proposed by the DOL in April, the n new’ wrule would vastly expand the eels ‘of who would
be deemed a fiduciary when providing Investment advice'to" retitement ihvestors and plans,
‘both in ‘the workplace and, $hrough IRAs.-These:vhanges would impact | ‘faillions‘ of people |
‘Working hard to $ave for retirement and.thousands of businesses corrimitted td the financial
health of their employees. The Department has accepted an enormous responsibility and it is
imperative to get it right. We believe a number of unclear or unworkable sections of the
proposal must be fixed to ensure investors are protected and access to investment guidance
and advice is preserved. :

For the sake of our constituents, we would like to focus‘our;corhments on problems with how
the proposed d rule treats small businesses:and, ultimately,’ their'employees who are. saving for

retirement. Under the proposed. rule,‘a small business owrier has limited options. They
ah the investment options themselves, but in'doing so:they subject thernselvés to fiduciary
. Thus a business owner becomes liable for that decision making since ERISA holds
fiduciaries to a best interest standard. In most cases, small businesses in Maine are experts in
many things, but most would tell you investment specifics are not arnong them. Second, a
small ‘business owner could conduct a diligent search; subject to fiduciary liability, for a.
qualified independent third party to do the selection forthem, but this would result in an

125 Community Drive, Suite 101 * Augusta, Maine 04330-8010, cel (207) 623-4568, fax (207) 622:7723 ' website: wwit:mainiéchamber.org * e-mail: info@mainechamber.org



additional fee. We would ask, shouldn’t we be finding ways to encourage businesses to offer
their workers retirement plans, rather than adding higher costs when they do?
Are our concerns valid? According to an industry survey,

¢ In 2014, close to 50% of small businesses surveyed indicated that without meaningful
assistance in selecting investment options to offer their employees, their likelihood of
offering a plan would be reduced.
4 ie) . Almost 30% of those small businesses with a plan indicated that it was at least
“"~ somewhat likely that they would drop their plan if this regulation were to go into effect.

It is clear to the Maine State Chamber that the DOL’s proposal is likely to have a substantial
impact on small businesses by dramatically changing the traditional manner in which advisers
and service providers deliver services to them and their employees. If these advisers and
providers are no longer able to offer these services to small businesses in an affordable
manner, it is the employees of these small businesses ~ the very individuals the rules purport to
benefit ~ that stand to lose. In addition, if small businesses can no longer afford to offer
retirement benefits, they will be less competitive with larger employers, placing the backbone
of this state’s economy — our small businesses -- at a competitive disadvantage when it comes
to recruiting and retaining quality employees.

A number of aspects of the proposal appear unworkable in actual practice, and would
negatively impact haw advisors assist small businesses in providing retirement benefits for their
employees. In particular, the change would impact two of the most popular retirement savings
vehicles for small businesses: Simplified Employee Pension IRAs (SEP IRAs) and Savings
incentive Match Plan for Employees IRAs (SIMPLE IRAs). It should be nated that in Maine, 80%
of all Maine employers are made up of business that employ 20 or fewer people.

Maine employers face enough challenges attracting and retaining workers, particularly younger
workers, to our state. Placing roadblocks on a small business’s ability to offer competitive, easy
to manage retirement plans to their workers will only exacerbate their struggles. it will make
them less able to compete for workers employed by larger companies either located in Maine
or outside our state.

In addition, it seems that the proposed rule actually limits an individual employee from
accessing affordable financial planning services and resources. In today’s complex investing
world, shouldn’t individuals have every avenue open to them for advice from the most
knowledgeable resources? We think so, but this proposed rule would reduce choices and the
availability of useful advice and guidance.

We understand and support the need for transparency and accountability when it comes to an
individual’s financial future, however it is our position that the proposed rule places too many
of our small businesses at a competitive disadvantage, and inhibits the availability of best
practice investment advice and counseling.



Thank you for your consideration of our concerns. We appreciate the opportunity to provide
you with our comments, and would be willing to work with you in any way that you may find
helpful on an issue that is critical to many of our smallest businesses and citizens.

Sincerely,

ck

Dana F, Connors
President & CEO
Maine State Chamber of Commerce