Led by Representative Judy Biggert (R-Ilinois), the House members, as did 30 of their Democratic colleagues last month, thanked Solis for withdrawing the proposal to change the definition of fiduciary under the Employee Retirement Income Security Act (ERISA). The letter says if the proposal was enacted, it would have “significantly reduced the retirement options available to millions of Americans.”
One point the letter makes is that Individual Retirement Accounts (IRAs) are “significantly different from employer-sponsored plans” and should therefore not be treated in the same way.
The letter includes the following criteria for a possible re-proposed definition as well:
- It is carefully and effectively targeted to address well-defined and documented problems in the retirement planning advice business
- It clearly recognizes that IRA accounts are significantly different from employer-sponsored plan because the IRA investor has nearly a limitless choice among service providers and investment products
- It ensures that plan participants and plan sponsors continue to be able to receive the critical information needed to expand retirement savings and coverage
- It preserves investor access to and choice among suitable financial products and services delivered by qualified financial professionals
- It avoids costly new regulatory requirements that exceed their proven benefits for investors
- It does not compound the investor confusion that the Securities and Exchange Commission’s recent study under the Dodd-Frank Act identified as the primary problem for retail investors. Effective regulation must add to public certainty, not diminish it.