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OPA Press Release: Labor Secretary Elaine L. Chao: First
Step
Complete On Improving Retirement Security
Encourages Increased Freedom To Manage Savings
WASHINGTON— Labor Secretary Elaine L. Chao said she was
encouraged by the first step the House of Representatives took today in its
passage of the Retirement Security Advice Act that will assist workers in
better managing retirement savings by expanding the availability of investment
advice.
"Today, the House took the first step in providing American workers with
an important tool to better manage their retirement savings," Chao said.
"President Bush and the administration are working to ensure that every worker
has access to a fulfilling and financially secure retirement. I look forward to
seeing the Senate take the next step and pass this legislation as soon as
possible."
For many workers, their employers represent the most convenient and
accessible source of investment advice regarding their retirement savings. This
bill would dramatically increase the number of financial advisers employers can
contract with to provide investment advice. To protect workers, the bill would
require advisers to be fiduciaries, requiring the advisers to act in the best
interests of plan participants. Advisers would be regulated by federal or state
authorities.
The bill would also provide extensive information to participants about
fees, relationships that may give rise to potential conflicts of interest, and
limitations on the scope of advice to be provided. These and other protections
in the bill provide a basic framework for assuring that advice is broadly
available and fairly provided.
In order to encourage employers to offer their workers investment advice
services, the bill clarifies that while employers have responsibility in
selecting and monitoring investment advisers, they are not required to monitor
the individual advice provided. The bill also would promote a more level
playing field for investment advisers and foster competition among firms
offering advice, resulting in lower costs for participants.
For more information please go to www.dol.gov.
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