Scott Lauds President's New Proposal to Strengthen Retirement Security
WASHINGTON--Congressman Robert C. "Bobby" Scott (D-VA), Ranking Member of the House Committee on Education and the Workforce, released the following statement today after President Barack Obama announced that the Department of Labor will lay out new standards to ensure retirement advisors act in the best interest of their clients when giving investment advice:
"Today's announcement by the President is another critical step toward improving every American family's retirement security. Too many middle-class and working families are worried about saving enough for retirement. According to recent data, 71 percent of Americans who are not yet retired say that it is too hard keep up with their bills and also save for retirement. And more than half of American households are at risk not saving enough to maintain their current standard of living in retirement. While we need to do more to help families save for retirement, the very least we can do is safeguard the retirement investments they have already made.
"Americans spend years putting hard-earned dollars away in individual retirement accounts to save for the future. In fact, today more than 75 million families save for retirement through their employer, and individual retirement account, or both. Unfortunately, many financial advisors receive backdoor payments or hidden fees for steering consumers into in appropriate retirement investments. If people cannot trust the professional advice they receive, they will have a harder time making smart investment decisions.
"The decades-long shift from defined benefit pension programs to 401(k) type savings plans has only further exacerbated retirement insecurity among American households. While 401(k) type plans are one successful way to save for retirement, some participants are being talked into risky or inadequate investment portfolios, despite being under the impression they are receiving sound advice.
"It's important to note that many financial advisors put the customers' best interest ahead of their own and do not accept any kind of kickback. These men and women take their fiduciary responsibilities and obligations very seriously; I commend them for their leadership in protecting Americans' retirement security. I hope that they will work closely with the Department of Labor to ensure that improved standards for retirement investing can effectively and efficiently implemented.
"Today’s proposal helps to create a level playing field for those acting in the interest of the consumer by ensuring that bad investment advice cannot be incentivized. This reasonable and commonsense proposal seeks to curb just one egregious practice – profiteering by steering customers towards inappropriate investments. For too long we have taken the approach that ‘advice given by those with serious conflicts of interest is better than no advice at all,’ but this only rewards unscrupulous behavior and harms working and middle-class families. Participants should have access to all the necessary information available to help them make informed retirement decisions. I commend the President for leading on this issue to protect and enhance retirement security for America’s workers."
For more information on President Obama's proposal to protect workers' retirement savings, click here.
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