Sen. Bernie Sanders, I-Vt. is applauding the Labor Department's new fiduciary rule proposal, stating that it "levels the playing field for consumers by applying a uniform advice standard to retirement investments," and "closes loopholes around rollover recommendations and advice to employers sponsoring 401(k) plans."
The plan, Sanders, chairman of the Senate Health, Education, Labor and Pensions Committee, told Labor in a Jan. 2 comment letter, "prohibits unscrupulous financial professionals from steering retirement savers into expensive or poorly performing products that provide an incentive for the advisor — even if it is not the best choice for the client."
In basic parlance, Sanders wrote, "this is known as providing 'conflicted advice' and it is significantly harming America's retirement savers."
Labor's authority to write a fiduciary rule "is also clear in ERISA's statute," Sanders along with Rep. Bobby Scott, D-Va., ranking member on the House Committee on Education and the Workforce, wrote in the comment letter. "In crafting the Proposed Rule as it did, the Department remained faithful to both the intent of and authority authorized by ERISA," the lawmakers wrote.
Both committees oversee the Labor Department.
The plan "will apply a fiduciary standard to recommendations to rollovers from a workplace retirement plan to an IRA, if certain reasonable criteria are met," the lawmakers wrote.
