A House committee approved two bills Tuesday seen as alternatives to the controversial Department of Labor fiduciary rule.
The fiduciary rule – which would hold anyone working with retirement funds, including IRAs, to a much tougher fiduciary standard – was sent to the Office of Management and Budget last week. It is expected to be published in March or April.
The alternative bills passed the House Education and the Workforce Committee in a party line vote. The Affordable Retirement Advice Protection Act was introduced by Rep. Phil Roe, R-Tenn., while the Strengthening Access to Valuable Education and Retirement Support Act was put forth by Rep. Peter Roskam, R-Ill.
“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,” Roe said in a news release. “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.”
It is unclear when, or if, the full House might hold a vote on the bills. Should either bill pass the full House and Senate, President Barack Obama has vowed to veto any legislation that trumps the DOL rule.
While House Democrats spoke out and sent a fall letter questioning the merit of the DOL rule, none supported the Roe and Roskam bills. Rep. John Kline, R-Minn., committee chairman, called the DOL rule “a reckless regulatory scheme” that will make it harder for low- and middle-income families to save for retirement.
“That’s the last thing our country needs,” he added. “Fortunately, there is a bipartisan, consensus solution that will strengthen protections for retirement savers and ensure robust access to affordable retirement advice.”
The Roe and Roskam bills would require an affirmative vote by Congress before any final rule by the DOL 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.
Consumer groups have slammed the House GOP bills as toothless versions of fiduciary that do not offer enough investor protections.
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