The U.S. Department of Labor is touting two new rules it says are designed to enhance retirement security and transparency for workers covered by 401(k), pension, and other retirement arrangements.
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Get Your Report Now!The announcement was part of the White House Middle Class Task Force's year-end report. The report details the year's work of the task force, and it includes a proposed rule on investment advice. The department also announced the publication of a final rule on multiemployer plan transparency.
The first of the two rules is aimed at ensuring workers receive unbiased advice about how to invest in their individual retirement accounts or 401(k) plans. The Obama administration says that if the rule is adopted, it would put in place safeguards preventing investment advisors from slanting their advice for their own financial benefit. Investment advisors also would be required to disclose their fees, and computer models used to offer advice would have to be certified as objective and unbiased. The department estimates that 2 million workers and 13 million IRA holders would be affected by the rule.
The second rule establishes new guidelines on the disclosure of funding and other financial information to workers participating in multiemployer retirement plans — those collectively bargained by unions and groups of employers. The Obama administration says it will ensure transparency by guaranteeing workers can better monitor the financial condition and day-to-day operations of their retirement investments. The rule will go into effect in April 2010.
The Bush administration took a stab at a final rule on investment advice, but the rule was withdrawn later by the Obama administration. At the time, the Obama administration said it decided to withdraw the rule based on public comments that raised doubts as to whether the conditions of the final rule and the class exemption associated with the rule could adequately protect the interests of plan participants and beneficiaries