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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2 Comments

  1. Edgar Allen Thomas
    Posted November 11, 2015 at 10:29 am | Permalink

    Please, Please! Consider the American Citizens for once.
    What in the world does the American Government, especially the Dept. of Labor have to do with our Retirement plans, & our freedom of speech to provide Financial advice. Seriouslya Fiducary Responsibility Rule.
    What can our government think of next to destroy business in America?
    Why does our government feel they have the rights to get involved into every aspect of our lives.

  2. Robb Smith
    Posted November 11, 2015 at 1:55 pm | Permalink

    We can only hope(???) both political parties will come together to stop any further intrusion into the private retirement system by an overreaching administration and DOL. The White House is sure to veto anything that is intended to slow encroachment into and the eventual takeover of the private retirement plan system (POTUS’ MyIRA is just the latest example). But, hopefully there still exists in common sense in Congress to say “enough is enough”.
    Naysayers will respond that this is just another example of blaming government when Wall Street is the problem. That argument holds no weight. But, bad (and over) regulation – just as like bad behavior in any industry – is like a stream of water – it will follow the path of least resistance. In Washington’s current state, that means circumventing laws and just issuing edits by executive order rather than time-tested and proven methods that mandate morality and decency.
    Everyone working in this industry (with the possible exception of mega banks and insurance companies) should be worried about the direction we are heading, because,unfortunately, most of us are not “to big to fail”. From day one of the founding of this country, one of government’s main edict has been to expand the private sector and create new jobs for small business – not the contraction of both. Maybe Congress will, after all, play an important role in preserving a vibrant private retirement plan system.

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