The Obama administration hopes to finalize a highly anticipated rule cracking down on conflicts of interest in retirement advising in the coming months, in addition to rolling out new proposals for expanding access to retirement account plans, a top official said Monday.
“We’re neck-deep right now in the review of that and we hope to reach a conclusion in the coming months,” Labor Secretary Tom Perez said of his agency’s work on the rule, known as the fiduciary rule.
The Labor Department finished receiving comments in the fall on the proposed rule, which would expand the category of investment advisers and brokers required to act in their clients’ best interests. The White House has estimated that U.S. workers lose $17 billion annually because financial advisers steer them into inappropriate high-fee investment products for which the advisers receive kickbacks.
Perez’s remarks came during a teleconference scheduled by the White House to preview retirement account-related proposals that will be included in President Obama’s upcoming fiscal 2017 budget.
The budget will include measures to expand access to workplace retirement savings accounts, including removing barriers to groups of small businesses creating pooled 401(k) plans and boosting tax credits for small businesses to automatically enroll workers in IRAs.
Obama economic adviser Jeff Zients said the measures are needed to reflect the changing nature of employment and the fact that fewer people work for the same company throughout their careers. Obama’s proposals, he said, would extend access to tax-privileged retirement accounts to 30 million people.
Perez suggested that the conflicts-of-interest rule and retirement account proposals were part of the same approach to prepare people for retirement.
“The two guideposts for the president in addressing retirement security are protecting consumers and promoting access,” he said.
“The conflict of interest rule involves protecting consumers,” he said, while the new proposals for reducing barriers to retirement accounts for small businesses and contractors “reflect the fact that tens of millions of Americans are working today and they have no retirement savings, except for Social Security.”
Elements of the proposals have been included in previous budgets. Perez said the proposals have bipartisan backing and he hoped that Congress would codify them.
