Staffers at the U.S. Securities and Exchange Commission and the U.S. Labor Department clashed over a controversial plan to curb potential conflicts of interest among brokers who give retirement advice, Senate panel Republicans said in a report on Wednesday.

Evidence of the discord between the two agencies is likely to be seized on by critics of the Labor Department proposal. The plan would require brokers to act in clients' best interests when advising about individual retirement accounts (IRAs), a savings vehicle for millions of investors.

But the Department, which regulates retirement plan advice, rejected numerous recommendations from the SEC and other agencies, wrote Republican Senator Ron Johnson, chairman of the Senate Homeland Security and Governmental Affairs Committee, in a 39-page report released on Wednesday.

The Labor Department "coordinated closely" with SEC staff, said Department spokesman Michael Trupo. The panel's report mischaracterizes documents, which show that Labor's "engagement with the SEC was comprehensive, and that the SEC’s input was incorporated into the plan," Trupo said. An SEC spokeswoman declined to immediately comment.

The Labor Department's plan has been in play for more than five years. On Jan. 29, the White House's Office of Management and Budget said it had received the department's final proposed rule. The White House does not have an exact time frame for implementing the rule.

Under the plan, brokers would have to act in clients' best interests, or as "fiduciaries," when advising about IRAs. Brokers now must recommend investments that are "suitable," based on factors such as investors' ages. But they can receive significant fees when advising clients to "roll over" assets from employer-sponsored retirement plans into IRAs.

Many Republicans and some Democrats oppose the plan, saying it would drive up customers' costs and curb commissions. The Securities Industry and Financial Markets Association has called for the OMB to conduct a comprehensive analysis of the rule's potential costs and benefits.

'Stop Emailing Me'

Part of the Senate panel's report focused on July 31, 2012 emails between Labor Department economist Keith Bergstresser and SEC economist Matthew Kozora. They discussed types of improper broker activity that the rule should measure: conflicts of interest or impact on investment returns.

"I hate to break it to you, but you're wrong," Bergstresser wrote to Kozora, according to the report. "People do not respond to fees or any other costs, but they do chase returns."