The U.S. Labor Department is dropping an investment advice proposal that would have allowed 401(k) participants to receive advice from financial firms that sell investments, according to Dow Jones Newswires.
The wire service reports the measure was one of several last-minute labor rules put forth by the Bush administration during its final days.
"We believe the final investment advice regulation published in the January 21st Federal Register went too far in permitting investment advice arrangements not specifically contemplated by the statutory exemption," Phyllis Borzi, assistant secretary of Labor's Employee Benefits Security Administration, said in a prepared statement.
Borzi added, "We are taking a fresh look at the regulation that was issued and are working to bring it more closely in line with the [Pension Protection Act of 2006] statutory language."
The federal pension law requires that employees have access to fair investment advice, notes Dow Jones. In January, labor officials from the exiting Bush administration said the rule would make investment advice more accessible for millions of Americans.
"However, some U.S. lawmakers, in particular House Education and Labor Committee Chairman George Miller, D-Calif., expressed concern that the rule would undermine worker savings by allowing financial services firms to offer investment advice that could benefit the firms instead of employees. Such opposition prompted the Obama administration earlier this year to postpone when the investment advice rule would take effect."