A recent survey co-sponsored by the Hispanic Chamber of Commerce, which found that small businesses would likely drop their retirement plans if the Department of Labor moves ahead in redefining fiduciary, is "bogus," and the survey questions are based on a "false premise," Dennis Kelleher, president and CEO of Better Markets, told lawmakers Tuesday.
In a Tuesday letter, Kelleher told lawmakers that the financial services industry "is once again trying to organize congressional opposition to the DOL's rulemaking using deceptive claims about the likely impact of the rule."
Indeed, an industry official says that the survey is now being "shopped around" Capitol Hill to get lawmakers to write letters expressing concern about the harmful potential impact of the DOL rule proposal.
Sen. Maria Cantwell, D-Wash., chairwoman of the Senate Committee on Small Business and Entrepreneurship, is said to be drafting a letter to DOL opposing its fiduciary rulemaking, and is seeking other senators to sign on to it. A call to Cantwell's office was not returned by press time.
The Greenwald & Associates telephone survey was commissioned by the law firm Davis & Harman LLP "on behalf of financial services organizations that provide retirement services to millions of Americans," according to Greenwald, and co-sponsored by the U.S. Hispanic Chamber of Commerce.
The survey found that nearly 30% of small businesses with a retirement plan said they would likely drop their plan, and nearly half would likely eliminate their employer contribution, if the DOL amended the definition of fiduciary under the Employee Retirement Income Security Act.
A DOL "expansion of fiduciary status" under its planned reproposal "will only impede the ability of small firms to offer their employees retirement-plan accounts, thus hindering American workers from saving for a reliable future," Javier Palomarez, president and CEO of the U.S. Hispanic Chamber of Commerce, said when the report was released.
However, Barbara Roper, director of investor protection for the Consumer Federation of America, told ThinkAdvisor on Tuesday that the "financial services firm lobbyists have gotten really sophisticated at concocting these misinformation campaigns," with the "'surveys' and 'studies' that they produce looking credible."
Regarding the Greenwald/Davis & Harman/Hispanic Chamber survey, Roper added that the survey is based on "an entirely false premise," which is that "the DOL is contemplating a rule to prohibit 'both retirement plan providers and the advisors who sell retirement plans to employers from assisting the employers in the selection and monitoring of the funds in the retirement plan.'"
