CHAMBER OF COMMERCE
OF THE

UNITED STATES OF AMERICA

RANDEL K. JOHNSON 1615 H Street, N.W.
Sentor Vice PRESIDENT Wasnincton, D.C. 20062
Lasor, IMMIGRATION & EMPLOYEE 202/463-5448 - 202/463-3194 FAx

BENEFITS

August 4, 2011
7 OM ong
The Honorable Hilda L. Solis Ss om
Secretary 1 OO
U.S. Department of Labor 5 m
200 Constitution Avenue, NW <
Washington, DC 20210 Hy

Re: Definition of the Term “Fiduciary”

Dear Secretary Solis:

I am writing this letter on behalf of the U.S. Chamber of Commerce (“Chamber”), the
world’s largest business federation, representing more than three million businesses and
organizations of every size, sector, and region. On February 3, 2011, the Chamber submitted
comments on the proposed regulation, Definition of the Term Fiduciary, issued by the
Department of Labor (“‘Department” or “DOL”) on October 22, 2010.

The Chamber supports the efforts of the DOL in updating the regulation on the definition
of a fiduciary to reflect modern realities. We believe that some changes are in order, principally
to update the definition of a fiduciary to clarify that certain investment professionals upon whom
plan sponsors rely for investment advice will be fiduciaries under the plan. However, as we
stated in our February 3, 2011 comment letter, a balance needs to be struck that protects plans
and participants while allowing for the free flow of information and services.

In this regard, there are certain areas where the Chamber believes that further
discussion or clarification is needed. In the earlier comment letter, we expressed a number of
serious concerns about the overly broad language of the proposal. We remain very concerned
about these issues, particularly given the inadequate economic analysis and lack of data
quantifying the economic impact of the proposal on workers, employers, and plan service
providers. Dozens of Members of Congress, from both parties, have also sent letters questioning
the Department’s economic basis for the sweeping policy changes in its proposal. Indeed, during
the recent House Subcommittee on Health, Education, Labor and Pensions hearing on the
proposed rule, Members from both parties expressed serious reservations about the proposal, and
asked that the Department revise the rule, conduct a thorough economic analysis quantifying
both the size of the perceived problem and the impact of the Department’s solutions, and re-

propose the rule for public comment.


The proposed regulation makes very major changes from what has been the status quo
for over 35 years. That makes it all the more important that the Department proceed in a manner
that will best serve its mandate to protect workers’ benefits. Moving directly to a final rule
would result in unnecessary disruption to the voluntary retirement system. Stakeholders would
not have the opportunity to see or comment on how the Department resolved the large number of
significant technical and substantive issues addressed in the voluminous comments on the
proposal or the regulatory impact analysis supporting the rule until conclusions are set in stone
and it would be too late to make changes.

The Chamber is very concerned about the unintended consequences. Given the scope
and complexity of the issues, a final regulation is virtually guaranteed to result in errors,
necessitating extensive clarification, revision, guidance, formal amendment, and, very likely,
litigation over both process and substance.

Workers and employers are best served by having the opportunity to review and
comment on a revised rule with a thorough economic analysis. Moreover, the President’s recent
directive to regulatory agencies requires no less. We believe this is the best course not only for
workers, but for the Department as well, as it will significantly reduce the confusion and
controversy attendant to the rule, as well as the likelihood of protracted, resource intensive
litigation.

We appreciate the opportunity to continue to work with the Department, and we would
be happy to discuss our concerns in more detail.

Sincerely,

Cc: The Honorable Phyllis Borzi
The Honorable Gene Sperling
The Honorable Cass Sunstein
The Honorable Bill Daley
The Honorable Tom Harkin
The Honorable Mike Enzi
The Honorable Max Baucus
The Honorable Orrin Hatch
The Honorable Dave Camp
The Honorable Sander Levin
The Honorable John Kline
The Honorable George Miller

' See, e.g., Business Roundtable & U.S. Chamber of Commerce v. SEC, No. 10-1305 (D.C. Cir. July 22, 2011).