DOL Asks for Budget Increase to Implement SECURE 2.0

Acting Secretary of Labor Julie Su testified before the House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on Wednesday to advocate for the Department of Labor’s budget proposal for fiscal year 2025.

The DOL requested a $13.9 billion total budget for 2025, an increase from $13.6 billion in 2024. The Employee Benefit Security Administration would receive $205.7 million under the proposed budget for the fiscal year that begins on October 1, an increase from $191.1 million, with $4.7 million set aside for implementing provisions from the SECURE 2.0 Act of 2022.

The Pension Benefit Guaranty Corporation would receive $514.1 million in general administrative funding, up from $512.9 million. The PBGC also reported asset surpluses for both their single and multiemployer insurance programs at the end of 2023. The single-employer program reported a $44.6 billion surplus, and the multiemployer program reported a $1.45 billion surplus.

The proposed budget did not make reference to the administration’s pending final retirement security proposal. The proposal would apply fiduciary standards under the Employee Retirement Income Security Act to a broader set of financial transactions, including one-time sales such as annuities, account rollovers, and investment menu designs. 

The Office of Management and Budget concluded its review of the proposal on April 11and the rule could have been published as soon as the following day. Industry sources believe that the final rule’s publication was delayed until after Su testified on the budget to avoid it being a distraction during the hearing. The rule is now expected to come out next week.

If keeping the rule out of the discussion agenda for the appropriations hearing, it worked. Only one member of the subcommittee brought it up at all, that was Representative Chuck Edwards, R-North Carolina. Edwards asked why the DOL was “rushing a rule that will significantly impact choice for low to middle income Americans and result in millions of Americans losing access to investment advice.” Edwards also criticized the 60-day public comment period, which lasted from November 3, 2023, to January 2, 2024.

Su responded, saying t the rule is a “long time in the making,” and the DOL has proposed similar rules in the past and held “informal conversations,” on the subject. Su then argued that the latest rule proposal is different from one in 2016 with similar aims that was struck down by the U.S. 5th Circuit Court of Appeals.

Neither the subcommittee, nor the full Appropriations Committee have scheduled  votes on the bill that includes the DOL’s budget.