The Department of Labor finalized its contentious Retirement Security Rule Tuesday. The rule updates the definition of an investment advice fiduciary under the Employee Retirement Income Security Act. It takes effect on Sept. 23.

The Biden Administration announced the Retirement Security Rule in October, saying its objectives were to ensure retirement advisors provide advice in the best interest of savers when offering insurance products and fixed index annuities, when advising on 401(k) rollover assets to an IRA, and when advising plan sponsors – including small employers – about which investments to include in 401(k) and other employer-sponsored plans.

In finalizing the rule, DoL noted the current definition of investment advice fiduciary was adopted in 1975 before 401(k) plans existed and individual retirement accounts were rare. It highlighted a recent analysis by the Council of Economic Advisers that found conflicted advice could cost savers up to $5 billion per year on just one investment product — fixed index annuities — chipping away at many workers' savings.