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November 26, 2001
Chao Lauds Retirement Legislation
"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 retirement plans represent the most convenient and accessible source of investment advice. This bill would dramatically increase the number of financial advisers employers can contract with to provide investment advice.
It would also require employers who offer their employees investment advice to act as fiduciaries, and work in the best interests of plan participants. Federal and state authorities would regulate employers' investment advice services.
To encourage employers to offer their workers investment advice services, the bill clarifies that employers have limited responsibility in selecting investment advisors and are not required to monitor the outcome of each investment.
In addition, the bill seeks to promote a more level playing field for investment advisers, foster competition among firms and promote lower costs to participants.
Employees would receive 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.
. Secretary of Labor Elaine L. Chao said she was encouraged by the first step the House of Representatives took last week in its passage of the Retirement Security Advice Act, a bill aimed at helping workers to better manage retirement savings by expanding the availability of investment advice.