We are issuing an update to our recent Alert regarding the final rules issued by the Department of Labor (“DOL”) with respect to fiduciaries under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Best Interest Contract Exemption ("BICE") from ERISA's prohibited transactions provisions. Both houses of Congress have taken action this week to disapprove DOL’s fiduciary rule and BICE exemption under the Congressional Review Act. In the House of Representatives, on April 21, 2016, the Education and Workforce Committee voted 22-14 to pass a Republican-backed motion of disapproval with respect to the fiduciary rule and BICE exemption. The motion of disapproval will go to the House floor next week for a final vote. In the Senate, a motion of disapproval has been introduced by Senators Johnny Isaakson (R-Ga.), Michael Enzi (R-Wyo.) and Lamar Alexander (R-Tenn.). The measure has been co-sponsored by another 30 Senate Republicans. The measure has not yet been scheduled for a vote by the Senate Labor Committee. Both Houses of Congress have 60 days from the issuance of the fiduciary rule and BICE exemption to pass their respective motions of disapproval.
Assuming that the disapproval measures are passed by both the House of Representatives and the Senate, it is expected that President Obama would veto such measures. In that event, it is unlikely that Congressional Republicans will have enough votes to override the veto.