House lawmakers from both parties presented a list of legislative principles to bolster the retirement security of today’s working families and ensure that retirement advisers work toward their clients’ best interests.
The group effort sprang from a regulatory proposal by the Department of Labor that many lawmakers and others fear will make it harder for low- and middle-income families to plan for retirement.
U.S. Reps. Peter Roskam (R-IL), Richard Neal (D-MA), Phil Roe (R-TN) and Michelle Lujan Grisham (D-NM) are working together to develop bipartisan legislation to offer a solution to this issue.
“We are concerned that the Department of Labor’s current fiduciary proposal may have unintended negative consequences that could harm individuals and families saving for retirement,” the leaders said in a joint statement. “We acknowledge the Department of Labor’s pledge to change aspects of the regulation before final issuance, but feel more must be done to adequately address concerns about the rule’s impact on the ability of low- and middle-class families to save for retirement.”
The legislative outline in development contains the following principles:
• Promoting families and individuals saving for a financially secure retirement is an essential public policy good.
• Retirement advisers must serve in their clients’ best interests and must be required to do so.
• Retirement advisers must deliver clear, simple and relevant disclosure of material conflicts, including compensation received and all investment fees to individuals saving for retirement.
• Public policies must protect access to investment advice and education for low- and middle-income workers and retirees.
• Public policies should never deny individuals the financial information they need to make informed decisions.
• Investor choice and consumer access to all investment services – such as proprietary products, commission-based sales, and guaranteed lifetime income – should be preserved in a way that does not pick winners and losers.
• Small-business owners should have access to the financial advice and products they need to establish and maintain retirement plans and help workers save for retirement.
“The Department of Labor has said it will change certain aspects of the regulation before final issuance,” the lawmakers said. “However, if the final rule has flaws, damage can be done upon the rule’s release due to the immediate changes the retirement savings industry would have to make and the likelihood that those changes could limit access to services and education for those saving for retirement. To protect the retirement savings of all Americans, we intend to introduce a bipartisan legislative solution.”
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