Winding its way through the reconvened Congress is a bill that would give employees access to investment advice about their pension assets. Introduced on June 21, 2001 by Rep. John Boehner (R-Ohio), the Retirement Security Advice Act (HR 2269) will give participants of employer-provided retirement plans the opportunity to receive investment advice from professionals. This legislation follows closely on the heels of the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (P.L. 107-16), which included a tax exclusion for qualified employer-provided retirement planning services.
Under H.R. 2269, employers would have the option of contracting with investment service firms to give investment advice to plan participants, an option once only open to participants who could afford outside investment advice. "The pension and investment world has changed dramatically in 27 years. The authors of ERISA never intended for millions of individual workers to have to become investment experts," Boehner said in a news release.
Included in the bill are important plan participant protections from abuses of
fiduciary responsibilities. Investment advisers under H.R. 2269 would be "fiduciary advisers," which the bill defines as "qualified entities that are already regulated under other federal and state laws." These fiduciary advisers would be required to act in the best interests of the participant, and would be subject to fiduciary duties as defined under ERISA. They also would be required to share fees and employer contract information with participants. The measure would leave participants still in control of all investment decisions.
The bill clarifies that employers and plan sponsors would not be responsible for specific advice, but would be responsible for the "prudent" selection of investment advisers.
The House Education and Workforce Committee´s Subcommittee on Employer-Employee Relations approved the bill on Aug. 2 and returned it to the full committee. The measure also was referred to the Ways and Means Committee.
From Employer''s Handbook: Complying with IRS Employee Benefits Rules, ©Thompson Publishing Group, Inc.
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