The Labor Department wants to expand accountability for employer-sponsored retirement plans to investment advisers.

The proposed rule, announced Oct. 21, would broaden the definition of "fiduciary" to further protect 401(k) participants from conflicts of interest, such as investment advisers recommending an option that brings in higher fees or promotes their own firm's funds, the agency said. A fiduciary under Labor Department rules must act in the best interest of the worker in the retirement plan.

"This current rule simply is not working," Assistant Labor Secretary Phyllis Borzi said in a conference call.

Those giving advice on an investment would be considered a fiduciary under the rule, Borzi said.

However, "if all they are doing is selling their product, then they aren't going to be a fiduciary," she said.

Employers generally have been held accountable for ensuring participants in 401(k) plans are given advice and investment choices in their best interest.

The regulation would classify advisers as fiduciaries even if they don't provide advice on a regular basis.

The measure would apply to employer-sponsored retirement plans and individual retirement accounts, according to the department.

A comment period will last until Jan. 20, Borzi said.

"We are reviewing the proposal," said Rachel McTague, spokeswoman for the Investment Company Institute, a trade group for mutual funds.

An estimated 72 million participants have 401(k)-type retirement plans, with assets totaling roughly $3 trillion, according to the Labor Department.

On Oct. 11 the agency announced regulations that will require 401(k) plan providers to provide investors information on administrative and investment fees charged to their accounts in their in quarterly statements by Jan. 1, 2012.

Fidelity Investments, Vanguard Group Inc. and T. Rowe Price Group Inc. are among the largest providers of 401(k) plans, according to Morningstar Inc.

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