Don't expect a fiduciary proposal for retirement advisers until next spring, expert says

Other proposals include states requiring small businesses to establish deferred-comp plans

Nov 11, 2013 @ 1:19 pm

By Liz Skinner

The earliest that the Labor Department is likely to propose a rule that would raise investment advice standards for retirement plan advisers is April or May 2014, according to a policy expert.

The rule proposal apparently is just reaching DOL Secretary Thomas Perez' desk and will likely take the rest of this year to get to the Office of Management and Budget, Brian Graff, chief executive of the American Society of Pension Professionals and Actuaries, said at the Schwab Impact conference in Washington D.C. on Monday.

The rule would expand the definition of "fiduciary" as it applies to anyone advising a customer about a retirement plan. The agency proposed such a regulation in 2010 but withdrew it after the financial industry complained it would curb compensation for brokers selling individual retirement accounts and potentially drive them out of the market.

Mr. Graff said advisers also need to be closely watching states because more than a dozen — including California and Illinois — are working on measures that would mandate that companies with five or more employees make a retirement savings vehicle available.

"We have not succeeded in getting millions of workers covered by a plan," he said. "The idea of a mandate is going to take hold in a state, and then eventually the federal government will get on this."

The state proposals will allow any payroll deduction IRA, but some also call for the states to get into the retirement plan business by providing a plan if an employer hasn't found applicable products to make available to its employees.

Mr. Graff said ASPPA is trying to make sure state lawmakers approach the issue in a way that involves the industry.

"We can't run away from this reality," he said.

On a separate issue, Mr. Graff said he doesn't anticipate that lawmakers will change the tax rules for Roth IRAs, though he could see down the road some type of excise tax being assessed on large amounts saved in Roths, such as those with $3 million or more.

"We believe it's wrong, but that's how they would try to do it," he said.

0
Comments

What do you think?

View comments

Most watched

INTV

Schwab's Jeff Kleintop: Prep for volatility given China trade uncertainties

China could be considered a developed market in five to seven years , according to Jeff Kleintop, chief global investment strategist, Charles Schwab.

INTV

Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

Latest news & opinion

Funding for Reg BI, other SEC advice reform efforts denied in Waters amendment

House likely to approve measure that effectively kills rule package, but it faces uphill battle in Senate

Wall Street lashes out at Sanders' plan to pay off student debt with a securities trading tax

Financial pros argue that a transaction levy will hurt mom-and-pop investors along with investment houses.

GPB paid B-Ds and reps steep commissions to sell troubled private placements

GPB paid commissions of 9.3%, or $167 million altogether, on the firm's private placements.

Give us a break, active managers say

Seven portfolio managers share their outlooks for the rest of the year, generally agreeing that it's been hard for active managers to stand out.

GPB Capital reports decline in value of two biggest funds

One has dropped by 25.4% and the other by 39%, according to the company.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print