Vice President Joe Biden introduced last week two new rules, which aim to enhance retirement security and transparency for workers covered by 401(k), pension and other retirement arrangements.
The rules were announced as part of the Middle Class Task Force’s year-end report.
According to the U.S. Department of Labor, the first of the two rules would ensure workers receive unbiased advice about how to invest in their individual retirement accounts or 401(k) plans. If the rule is adopted, it would put in place safeguards preventing investment advisors from slanting their advice for their own financial benefit. Investment advisors also would be required to disclose their fees, and computer models used to offer advice would have to be certified as objective and unbiased. The department estimates that 2 million workers and 13 million IRA holders would benefit from this rule to the tune of $6 billion.
The second rule establishes new guidelines on the disclosure of funding and other financial information to workers participating in multiemployer retirement plans — those collectively bargained by unions and groups of employers. It will ensure transparency by guaranteeing workers can better monitor the financial condition and day-to-day operations of their retirement investments. The rule will go into effect in April.
President Obama launched a Middle Class Task Force in January 2009. The initiative, chaired by Biden, is targeted at raising the living standards of middle-class, working families through training and education, improving work standards and protecting retirement security.