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House Bill Would Block DOL Rule to Protect Workers’ Retirement Savings

Photo via Alliance for Retired Americans.

A bill (H.R. 2374) set for a vote in the House Tuesday would delay and could ultimately thwart the Department of Labor’s effort to protect workers’ retirement security. The DOL wants to close loopholes and update the rule that protects workers from deceptive or abusive practices whenever they seek investment advice about their retirement savings

Call Congress at 1-888-912-5898, ask for your representative’s office, and urge him or her to protect workers’ retirement security and oppose H.R. 2374.

The way workers save for retirement has changed dramatically over the past decades. With the decline in traditional pensions, more and more workers depend on 401(k)s and individual retirement accounts (IRAs) and they frequently seek investment advice from financial professionals. But the rule governing when that advice must be solely in the worker’s interest, free from conflicts of interest, has not been modernized since 1975 and many loopholes exist.

The rule has been under development for some time, but has not been published yet. However it is expected to require that investment advisers have no conflict of interest, that might, for example, cause them to steer their clients toward investments that earn the adviser high fees, but might not be in the client’s best interest.   

The DOL has conducted extensive analysis and consulted with the financial industry during its rulemaking process, but H.R. 2374 erects several roadblocks. It requires the Securities and Exchange Commission (SEC) to make certain findings before it can issue a companion rule and then requires the Labor Department to wait until the SEC promulgates its rule before it can go forward..     

In a letter to House members, AFL-CIO Government Affairs Director William Samuel says, “The intent behind this bill is to delay the Commission rule and thereby also block DOL from carrying out its statutorily required responsibilities.” He adds:

This bill affects all workers who are trying to save for their retirement. The primary way most working people invest in the capital markets is with their retirement savings— frequently their biggest financial asset. They are counting on making the most of their money when they seek investment advice; they are counting on that advice being free from conflicts of interest. That is what is at stake here. 

Call Congress at 1-888-912-5898, ask for your representative’s office, and urge him or her to protect workers’ retirement security and oppose H.R. 2374.

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