U.S. Senator Johnny Isakson (R-GA), chairman of the Senate Health, Education, Labor and Pensions Subcommittee on Employment and Workplace Safety, recently introduced the Affordable Retirement Advice Protections Act. This new legislation is meant to protect access to affordable retirement savings services for low- and middle-income Americans.
Isakson’s legislation is one of a series of proposals sponsored in the U.S. Senate and House aimed at protecting consumers and keeping high-quality financial advice affordable for all Americans. This bill specifically is part of Isakson’s fight to prevent the Department of Labor from finalizing its proposed investment and retirement regulation, known as the “fiduciary rule”, which had been withdrawn in the past amid widespread bipartisan criticism. In a press release posted on his website Thursday, it was stated that the Department of Labor’s proposal, which the Office of Management and Budget has 90 days to review, is “counterproductive to its intended goal of increasing retirement savings participation and providing employers with the tools necessary to help them provide plans for their employees”. It is believed that it would limit workers’ access to low-cost financial education and guidance services and would have negative effects for retirement savers of low- and middle-income families. Isakson released this statement about the Department of Labor’s proposal:
“Middle class families should have a choice of who to work with to get financial help,”Isakson said. “Big government policies that cause the middle class to lose this choice will make our retirement crisis worse. That’s what this proposed rule will do. It will hurt the hardworking Americans it was supposed to help.”
Isakson’s bill would amend the Employee Retirement Income Security Act of 1974 to raise investment advice standards for the retirement industry, as well as strengthen protections for those saving for retirement. It would also require Congress’ approval of any investment advice rule proposed by the Obama administration. This bill is an effort to preserve access to quality financial planning and to ensure that retirement advisors serve in Americans’ best interest.
Isakson released this statement on his fight via press release:
“A comfortable retirement is part of the American Dream. Unfortunately, the fine print included in hundreds of pages of Department of Labor regulations that seek to redefine a single word [fiduciary] would deny millions of Americans the chance to plan ahead,” said Isakson.“Retirement planning shouldn’t be priced out of reach for hardworking taxpayers in middle- and lower-income families. I am fighting to ensure the Obama administration’s costly and cumbersome regulations, which would severely limit access to investment advice for the families who need it most, are thwarted before they become a crippling reality for those seeking the American Dream.”
Isakson is also an original cosponsor of the Strengthening Access to Valuable Education and Retirement Support Act introduced by Sen. Mark Kirk (R-IL). Both of these bills would block the fiduciary rule and provide an alternative that would raise standards for the retirement services industry and strengthen protections for savers by directing retirement advisors to serve in their clients’ best interests. It would penalize financial professionals who violate the trust of their clients, require clear communication of key information by advisors, and will ensure advice and investment options are available to individuals seeking retirement savings guidance.
Isakson’s bill will require a vote by Congress before any final rule goes into effect.