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Bill Looks to Shield IRAs from DOL’s Fiduciary Reach

Another bill looking to derail the Labor Department’s fiduciary proposal has been introduced in Congress.

This one, the Retirement Choice Protection Act of 2015 (H.R. 3922), was introduced by Rep. Mike Kelly (R-PA) — a member of the House Ways and Means Committee — with Social Security Subcommittee Chairman Sam Johnson (R-TX). According to a press release, the legislation would provide a workable “best interest” standard to the DOL’ proposed rule on fiduciary standards.

The bill would transfer authority for individual retirement plans to the Secretary of the Treasury, and outlines a best interest standard for advice fiduciaries regarding IRAs and non-ERISA plans.

Last month Kelly, the Republican chairman of the House Retirement Security Caucus, co-authored a joint letter with Johnson to Labor Department Secretary Thomas Perez (and signed by 103 members of Congress) to express concerns that the proposed fiduciary rule “will severely disrupt the availability of affordable financial education and investment advice while also restricting product choice and retirement security for many American families” and to urge the secretary to implement “substantial changes” to fix the rule’s shortcomings.

This is just the latest of several varied moves by legislators to curb, caution or cure the perceived potential ills of the Labor Department’s fiduciary proposal. In addition to the letter cited above, the U.S. House of Representatives recently passed legislation that would block the Department of Labor from finalizing its fiduciary proposal until the Securities and Exchange Commission weighs in, though by nearly completely partisan lines. That said, a number of Democratic members of Congress have expressed concern about the proposal throughout the process (see Congressional Dems Pushing Back on Fiduciary Proposal, Senate Finance Dems Say Fiduciary Proposal Can Be ‘Improved and Enhanced’ and 18 House Dems Seek Longer Comment Period for Fiduciary Rule). The latest? A letter from nearly 50 members of Congress to Secretary of Labor Thomas Perez requesting that the Labor Department open a 15-30 day comment period prior to finalizing the fiduciary proposal.

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