Witnesses Welcome Bipartisan Effort to Protect Retirement Security
WASHINGTON, D.C., December 3, 2015
The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), held a hearing this week on principles guiding a bipartisan effort to strengthen the retirement security of workers and ensure retirement advisors protect their clients’ best interests. Members also discussed widespread concerns regarding a recent Department of Labor (DOL) proposal that will make it harder for individuals to plan for retirement.
“As policymakers, we should be doing everything we can to ensure workers are able to effectively plan for life after leaving the workforce. Unfortunately, we’re here today because a proposal from the Department of Labor is threatening to make it harder for workers to do that,” Chairman Roe said during opening remarks. Elaborating on lawmakers’ bipartisan solution, he explained, “Our proposal will strengthen retirement security, but, unlike the department’s approach, it will do so without hurting working families and small businesses … We believe that financial advisors should look out for their clients’ best interest, but we also believe the rules governing financial advice should do no harm to those saving for retirement.”
Known as the “fiduciary rule,” the department’s proposal will impose on financial advisors a host of costly new mandates and burdensome regulatory requirements, which witnesses explained will have far-reaching consequences for low- and middle-income families and small businesses. Jules Gaudreau, a financial advisor serving largely middle-income individuals, noted that the “complex and expensive” proposal will “create barriers to financial advice that will be insurmountable for many if not most middle-income Americans.”
Expressing similar concerns, small business owner Rachel Doba said, “I have a trusted advisor that has provided great service, which has allowed me to provide retirement security for my employees and me. This proposal puts all of that in jeopardy.” She added that the rule will “make it harder for small business employers and employees to access financial advice” and could result in “substantial negative repercussions” for her employees and those of many other small businesses.
Witnesses also offered support for the legislative principles that Republican and Democratic lawmakers have said their bipartisan solution will reflect. Calling the principles a “bold step in the right direction,” former Assistant Secretary of Labor for Employee Benefits Bradford Campbell said they “form a solid foundation for meaningful legislation.” He continued, “This approach far better serves the interests of retirement savers than the department’s effort to change the entire regulatory structure governing retirement advice.”
“This effort to craft a bipartisan legislative alternative to the DOL proposal is critically important. The principles upon which the alternative will be based are exactly right,” Gaudreau added. “A bipartisan legislative alternative will protect retirement savers’ investment choices, their access to professional advice and education, and their hard-earned savings.” He also noted, “Those of modest means who are doing their best to save for a secure retirement will benefit the most from your efforts.”
To learn more about the hearing, or to watch an archived webcast, visit www.republicans-edlabor.house.gov/hearings.
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