Prohibited Transactions

U.S. retirement assets totaled $18 trillion as of March 31, according to the Investment Company Institute in Washington. Savings in individual retirement accounts were $4.9 trillion at the end of the first quarter, while assets in 401(k)-type plans were $4.7 trillion, ICI data show.

The Labor Department should clarify which actions would be exempted and wouldn't trigger prohibited transaction penalties, said Roper of the Consumer Federation. The agency also should close a loophole in the regulation that "you could drive a truck through," which exempts investment professionals who only sell a product, Roper said.

"If all they are doing is selling their product then they aren't going to be a fiduciary," Assistant Secretary of Labor Phyllis Borzi said in an October conference call when the rule was proposed.

"They are putting their entire rule at risk in their rush to finalize this," Roper said. The Labor Department has said it plans to make the rule final by the end of this year.

SEC Rules

As part of the Dodd-Frank financial-services overhaul law enacted last July, Congress asked the Securities and Exchange Commission to study existing standards for registered investment advisers and broker-dealers. In January, the SEC recommended a common standard for those who provide personalized investment advice.

The agencies are working together to make sure the final rules don't conflict, Borzi said at a hearing in March.

The Labor Department rule also may apply to advice given to savers when they are leaving a job and trying to decide whether to roll their money into IRAs. Fees on IRAs typically are 25 basis points to 30 basis points higher than fees on 401(k)s, and can be as much as 65 basis points higher, the GAO study said. A basis point is 0.01 percentage point.

The shift by employers to 401(k)s from traditional pension plans has meant that workers have more responsibility for how they invest their retirement savings, according to a July statement by the Pension Rights Center in Washington. The consumer advocacy group said it supports the Labor Department's regulation because savers are "highly dependent" on the advice they receive, which may be subject to conflicts of interest.