Labor Secretary Elaine L. Chao: First Step Complete On Improving Retirement Security

Archived News Release — Caution: Information may be out of date.

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.

Archived News Release — Caution: Information may be out of date.