The so-called Boehner Bill has passed both the Education & the Workforce Subcomittee and the House Ways & Means Committee have approved the Boehner Bill (see Ways and Means Greenlights Advice Bill and Modified Boehner Bill Heads for the House ).
In addition, Commerce Secretary Donald Evans and Treasury Secretary Paul O?Neill both recently endorsed the bill, following the endorsement by the Labor Department (see Advice Bill Gains Treasury, Commerce Support .
The Employee Retirement Income Security Act (ERISA) creates barriers that currently prevent employers and investment service providers from giving individualized investment advice to workers. Boehner’s bill attempts to address this problem by allowing employers to provide participants with access to investment advice, provided the advisers disclose any fees or potential conflicts. It also aims to ensure that participants will receive advice solely in their best interests.
Senators Jeff Bingaman and Susan Collins introduced their version of the advice bill yesterday, one that aims to protect employers without removing some of the party-in-interest barriers that currently prevent investment management services firms from providing investment advice (see Conflicting Opinions: Advice Bill Introduced in Senate ). That bill has already drawn the support of the American Association of Retired Persons (AARP), the Small Business Council of America, the American Society of Pension Actuaries, and the Financial Planning Association.
Judy Shub, Managing Director of Pension and Investment Policy for the CIEBA an affiliate of the Association of Financial Professionals, commenting on the new bill’s introduction said “we encourage any efforts that enable plan sponsors to provide advice to their participants,” adding that the CIEBA “does not really see the two bills as being in conflict.”
“CIEBA is interested in working with the appropriate people on the hill to see that legislation is passed that will make it possible for plan sponsors to provide advice to their participants,” she concluded.
The American Benefits Council took a similar view, James Delaplane, Vice President, Retirement Policy, noted that although the group had “yet to review the final text of the bill, we generally support any legislation that responds to the need participants have for investment advice.”
He added that, “we don’t necessarily see the two bills as in opposition to one another, we are pleased when anyone takes the lead in introducing advice legislation.”
On the Other Hand?
Reacting to the introduction of the Bingaman-Collins bill, a spokesman for the Education & the Workforce Committee said, “We appreciate Sen. Bingaman’s interest in this issue. However, his bill only deals with half the problem, clarifying employer liability, and it also includes restrictions that discourage any empl