WASHINGTON, D.C. | July 19, 2017
For years, the Committee on Education and the Workforce has been fighting to preserve access to affordable retirement advice.
Since the Obama administration first proposed changes to the policies governing retirement advice, we’ve led oversight efforts here in Congress.
As the former chairman of the subcommittee on Health, Employment, Labor, and Pensions, I presided over a number of hearings where we heard firsthand how this new rule will jeopardize small business retirement plans, make it harder for low- and middle-income individuals to save for retirement, and restrict basic services, such as assistance in rolling over funds from a 401(k).
Although this misguided rule has already taken effect, our fight continues on behalf of hardworking men and women in my home state of Tennessee and across the country.
To be clear, we completely agree that Americans deserve retirement advice that’s in their best interest. That’s what we’ve been saying all along.
But a rule requiring so-called “sound retirement advice” achieves nothing if it means many people will no longer have access to retirement advice at all. According to one estimate, seven million retirement savers may lose access to advice altogether because of the fiduciary rule.
We are just beginning to see the real-world consequences of this rule take shape. Firms are starting to eliminate more affordable retirement account options in favor of fee-based plans that are out of reach for many families with lower incomes.
We don’t have to accept these consequences. We can pass legislation to fix the fiduciary mess while enhancing protections for retirement savers at the same time.
The proposal before us today will do just that. The Affordable Retirement Advice for Savers Act does not simply repeal the Obama administration’s fiduciary rule; it amends the Employee Retirement Income Security Act and the Internal Revenue Code to establish a statutory definition of “investment advice.”
Unlike the confusing, complicated and unworkable fiduciary rule, this clear standard would require retirement advisors to act in the best interests of their clients without causing millions of Americans to lose access to their trusted financial advisor, and without limiting the ability of small businesses to help their employees save for retirement.
In other words, this proposal achieves the Obama administration’s alleged goal of holding financial advisors accountable without undermining the retirement security of working families.
When the American people face a harmful rule that will have such a far-reaching, negative impact, we have a responsibility to do everything we can to stop it. We cannot stand idly by as a new rule threatens to weaken our nation’s retirement security at a time when so many families are struggling to save and invest. In 2015, the GAO found that 29 percent of Americans 55 and older have no retirement savings and no traditional pension. In fact, today, nearly 40 million working families haven’t saved a dime for retirement.
I hope members of both parties will do the right thing and support the Affordable Retirement Advice for Savers so we can strengthen retirement protections and empower more Americans to plan for the future they want.