The U.S. Department of Labor announced two new regulations last week intended to increase retirement account transparency. "These rules will strengthen America's private retirement system by ensuring workers get good, objective information,” says U.S. Deputy Secretary of Labor Seth Harris. “When that happens, workers make the kind of decisions that are good for their families and the nation as the whole."
[See 5 Proposals in Obama’s Budget for Retirement Savers.]
The first proposed rule aims to ensure workers receive unbiased advice when choosing 401(k) and IRA investments. The regulation would require investment advisers to disclose how they earn fees and prevent them from slanting their advice for their own financial benefit. Computer models used to offer advice would also have to be certified as objective. The Department of Labor will accept comments on this rule until May 5.
The second regulation, which will go into effect in April 2010, sets new guidelines for retirement plans that are collectively bargained by unions and groups of employers. They must now disclose funding and other financial information, such as periodic actuarial or financial reports, to participating workers who request them within 30 days or face a penalty of up to $1,000 a day for each violation.
[See New Details of Obama’s Automatic IRA Proposal.]
Earlier in February the Labor and Treasury departments announced they were seeking public comments about the benefits and drawbacks of adding a lifetime annuity option to worker retirement accounts that will provide a stream of income after retirement. The government agencies are accepting comments and advice on this proposal until May 3.
Tell us, will these proposed rules help get workers to a secure retirement?
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