The debate over the Department of Labor’s fiduciary rule for retirement planning should be moved to Congress, according to the Insured Retirement Institute.
The IRI said it is confident implementation of the rule will be delayed beyond the April deadline, while outlining its priorities for 2017 on Monday.
“IRI supports a best-interest standard of care, but Congress is the right place for this debate to be held,” says Lee Covington, IRI senior vice president and general counsel. “The DOL underestimated the amount of time it would take for advisors, and particularly annuity providers, to comply.”
“Congress should establish a consistent best-interest standard of care that protects affordable access to professional financial guidance, preserves access to retirement advice, and [allows providers to] offer a wide array of lifetime income products,” IRI said.
Only 23 percent of baby boomers are highly confident their savings will last through their retirement, Covington says. At the same time, investors who work with a financial planner save twice as much for retirement as those who do not have a planner. The IRI priorities are set against that backdrop, he said.
IRI will advocate for laws to allow more small businesses to band together to provide retirement plans for their employees.
IRI does not support the initiatives of state and local governments to enact legislation that establishes state or local government sponsored retirement plans for those who do not have employer-provided plans. IRI supports the Congressional Review Act resolutions that would nullify the DOL rules that establish new ERISA safe harbors for state and local government retirement plans for private sector workers.
Another priority area is protecting seniors from fraud and financial abuse, which amounts to $2.9 billion a year, or an average of $127,000 per victim, IRI said.
Legislation should be enacted to require lifetime income estimates on workers’ benefit statements and encourage employers to offer retirement plans for workers if workers do not have access to other retirement plans, IRI said.
IRI 2017 priorities are aimed at expanding access to workplace retirement plans, increasing lifetime income options to help Americans ensure their savings will not be outlived, protecting access to professional financial advice and preserving the current tax treatment and structures for Americans’ retirement plans, said Cathy Weatherford, IRI president and CEO.