WASHINGTON, D.C. — The Obama administration on Friday proposed new regulations aimed at protecting workers’ retirement savings from unethical financial advisers.
The safeguards would protect workers from conflicts of interest on the part of advisers who manage their 401(k)s and individual retirement accounts. The administration estimates that the protections would affect 15 million workers.
The proposed regulations would require retirement investment advisers and money managers to either base their investment advice on objective computer models certified by independent experts, or refrain from steering workers into funds they are affiliated with or from which they are receiving a commission.
Vice President Joe Biden and Deputy Labor Secretary Seth Harris announced the proposal during a meeting of the White House Middle Class Task Force. Biden said the regulations meet the task force’s goal of helping middle class families plan for a secure retirement.
“A lot of folks are not getting the best treatment, the best advice and the most help in figuring out how to deal with their retirement plans,” Biden said.
If the Labor Department enacts the proposed regulations, the rules would apply to all financial institutions that offer 401(k) programs to employers and offer financial advice to their employees.