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The House Committee on Education and the Workforce, chaired by Rep. John Kline (R-MN), today approved two bipartisan bills that will strengthen the retirement security of working Americans: the Affordable Retirement Advice Protection Act (H.R. 4293), introduced by Rep. Phil Roe (R-TN), and the Strengthening Access to Valuable Education and Retirement Support Act (H.R. 4294), introduced by Rep. Peter Roskam (R-IL). The complementary proposals will require financial advisors to serve their clients’ best interests and protect access to high-quality, affordable retirement advice.

“These bills are an important part of a much broader effort to ensure Americans are able to retire with the financial security and peace of mind they deserve,” said Health, Employment, Labor, and Pensions Subcommittee Chairman Roe. “Too many hardworking men and women struggle to build the financial security they need when they retire. That’s why we put our heads together to develop a bipartisan solution that will empower Americans to make retirement decisions that will work best for them and their families. These bipartisan proposals will deliver the protections working families need to plan for the years ahead, and unlike other flawed proposals we’ve seen, they’ll do so without hurting those most in need.”

“The Department of Labor is pursuing a reckless regulatory scheme that will make it harder for low- and middle-income families to save for retirement,” said Education and the Workforce Committee Chairman John Kline. “That’s the last thing our country needs. Fortunately, there is a bipartisan, consensus solution that will strengthen protections for retirement savers and ensure robust access to affordable retirement advice. It achieves the same goal as the Department of Labor’s proposal, but in a way that doesn’t hurt small businesses and working families. Chairman Roe has been leading this effort for years, and his hard work is reflected in this proposal. It is my hope that we can continue to move this bipartisan legislation forward and help more Americans retire with the dignity and financial security they deserve.” 

BACKGROUND: Known as the “fiduciary rule,” the Department of Labor’s regulatory proposal will impose on financial advisors new mandates and regulatory requirements. Bipartisan concerns have been raised that the proposal could cause individuals to lose access to trusted retirement advisors, raise the cost of receiving financial advice, and lead to fewer small businesses offering retirement plans. In response, Republican and Democratic lawmakers introduced a set of principles to form the basis for a legislative solution that will strengthen retirement security without harming working families and small businesses.

Those principles are reflected in the bipartisan legislative proposals introduced in December 2015. The Affordable Retirement Advice Protection (The ARAP) Act, led by Rep. Roe, and The Strengthening Access to Valuable Education and Retirement Support (SAVERS) Act, led by Rep. Roskam, would require an affirmative vote by Congress before any final rule by the Department of Labor goes into effect. If Congress fails to approve the department’s regulatory proposal, a new fiduciary standard would take effect that:

• Raises the bar for the retirement services industry by requiring advisors to serve in their clients’ best interests;

• Requires advisors to clearly communicate key information to ensure investors are well-informed to make investment choices; and

• Ensures that individuals and families saving for retirement have access to advice and investment options to meet their individual needs and circumstances.

By amending the Internal Revenue Code of 1986 (The SAVERS Act) and the Employee Retirement Income Security Act of 1974 (ARAP Act), the proposals together will raise investment advice standards for the retirement industry to ensure financial advisors act in the best interests of their clients, while also ensuring low- and middle-income Americans have access to quality, affordable financial advice to help plan for retirement.

To read opening statements or watch an archived webcast of today’s markup, visit www.republicans-edlabor.house.gov/markups.

 

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