The Subcommittee on Health, Employment, Pensions and Labor of the House Education and Labor Committee today approved legislation by a 13 to 8 vote to protect workers from conflicts of interest when receiving retirement investment advice at work.
“The American retirement system has already suffered $2 trillion in losses due to last year’s economic collapse. Now more than ever, Americans cannot afford to subject their hard-earned retirement savings to the increased threats posed by conflict-driven advice,” said U.S. Rep. Rob Andrews (D-NJ), chairman of the subcommittee in a released statement. “Working Americans deserve and require conflict-free advice so that they can make informed and responsible decisions about their financial future.”
The Conflicted Investment Advice Prohibition Act of 2009 (H.R. 1988) would restore federal safeguards that ensured that investment advice provided to workers on their employer-sponsored retirement plan be independent and free from any conflicts of interest.
The subcommittee also approved the 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984), which it says will help workers shop around for the best retirement options by requiring simple fee disclosure on the investment options contained in their employer’s 401(k) plan. Current law does not require all fees workers pay to be disclosed; and even for information that is available, it can be difficult for workers to find and evaluate.The bill will be considered by the full Education and Labor Committee.
“When a worker spends most of their lifetime investing their hard-earned dollars into an account for their retirement and later discover that they were being charged fees that contributed to a significant loss of their nest egg, they understandably lose trust and confidence in the system,” said U.S. Rep. Rob Andrews (D-NJ), chairman of the subcommittee and cosponsor of the bill. “The lack of transparency in the 401(k) system is unacceptable and must end now.”