WASHINGTON Legislation introduced last week by Rep. John Boehner, R-Ohio, seeks to alter a 1974 law that prohibits employers and their retirement savings plan providers from giving investment advice to workers.
The Employee Retirement Income Security Act prevents institutions that provide employers with mutual funds and other savings products from advising plan users.
The new bill, the Retirement Security Advice Act, would clarify employers roles in the financial advice process, alleviating them of responsibility for specific advice their employees receive from financial professionals. Employees would also be protected under the legislation, by requiring all advisers to fully disclose fees and potential conflicts, and by holding advisers accountable for acting in the employees best interests.
The American Bankers Association has endorsed the bill. Edward Yingling, the groups executive director for government relations, said in a statement, The bill assists employees in providing for their future retirement security and the well being of their families.
Mr. Yingling also said numerous changes in the retirement market have rendered the current law obsolete.
The Investment Company Institute, a national mutual fund trade group, also praised the bill, citing a need for reform arising from an increase in defined contribution plans and changing financial markets.