WASHINGTON, DC – Today, the Biden administration finalized the Retirement Security Rule, which will protect working people’s retirement savings by holding financial advisors to higher standards. Specifically, the new rule closes loopholes in current law to ensure that advice is given in the best interest of the saver. Last month, Senator Fetterman led a letter to the Department of Labor (DOL) and Office of Management and Budget (OMB) urging them to finalize the proposed rule. Senator Fetterman released the following statement in response to the administration finalizing the rule:
“In every corner of the economy, the Biden administration is fighting for working families. From cracking down on junk fees to making sure working Americans get the most out of their money—even when it pisses off the financial industry and their lobbyists. This new rule is the latest example of that.”
“When someone goes to a financial advisor for guidance on where to put their hard-earned savings, they should be able to trust that their interests are put first. But until now, they couldn’t. Before this new Retirement Security Rule, it was perfectly legal for advisors to give advice that padded their own commissions, even if they knew it would yield worse returns for the saver. That’s just wrong and—thanks to this new rule—it’s now against the law.”
This rule will translate into meaningful savings for working people. Analysis from Morningstar estimates that investors in retirements plans will save more than $55 billion in the first decade of this rule. Moreover, savers who purchase annuities will save over $32.5 billion from the proposal.
The rule is supported by a broad coalition of groups and organizations, including the Certified Financial Planners Board (which represents about one-third of all financial advisors), the AARP, and 36 national labor unions, including AFSCME, SEIU, AFL-CIO, and the Steelworkers.