Vice President Biden Announces New Proposed Regulations for Retirement Savings
EmailABC News’ Karen Travers reports:
Vice President Biden announced today new proposals to protect Americans’ retirement savings at an event focused on helping the middle class in these tough economic times.
The proposed regulations from the Department of Labor are aimed at protecting workers from potential conflicts of interest by their financial advisers and expanding opportunities for employers to offer their staffs expert investment advice.
“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. “It's a big deal. It will impact upon … the way in which families planning for their retirement are able to have a better prospect of their retirement benefits being enhanced and not diminished.”
The White House said the proposed regulations would allow financial institutions to give workers advice on investments if they follow one of two rules:
- Advisors are not compensated for steering workers into investment choices that are more profitable for financial institutions.
- The advice is based on an objective computer model that has been certified by an independent expert.
The White House said today that the proposals would affect tens of millions of Americans and will apply to all financial institutions that both provide investment options such as 401(k)s to employers and offer financial advice to employees.
“A secure pension system is also essential to the long-term health of our economy,” said Deputy Labor Secretary Seth Harris.”Whether it's in 401(k)s, private-sector-defined pension plans, individual retirement accounts or public-sector pension plans, workers' pension monies create tremendous pools of investment capital that create jobs and expand our economy.”
Biden announced the new regulations at an event unveiling a new report from the Middle Class Task Force.
The vice president said there is “a growing gap between productivity and middle-class incomes, a rise in economic inequity that continues and an ever-mounting challenge of balancing work and family responsibilities.”
Biden said he and Obama believe that the nation cannot have a strong economy without a strong middle class.
“That becomes the bedrock of what we're trying to do here," he said. "Right now, the middle class in this country is nowhere near as strong as it needs to be.”
-Karen Travers
Obama: 'Now Is the Time For Common Sense Action' 
Romney Takes Aim at Conservatives
I’m now unemployed but our gross income is still too high to qualify for the Making Home Affordable plan and my house is at least 30% underwater.
How about thinking out of the box for a change. Maybe a temporary freeze on the 10% 401K early withdrawal penalty if you use it for something useful like paying your mortgage 12 months in advance. Or not taxing it all all (or at a lower rate) if you withdraw enough to completely pay off your mortgage. Give the people (who have stuck with their homes and paid their mortgages but have watched their home values go down and down) some incentives that work.
This is supposed to be the administration of innovation, hope and change. Yet all we see is the same tired old gimmicks that don’t help the people who deserve a break: like me!
Posted by: For The Record | February 26, 2010, 7:06 pm 7:06 pm
Posted by: For The Record | Feb 26, 2010 7:06:24 PM
I suppose after whining about the admin and Dems in general, who have always had a better record on helping the middle class, you’re going to turn around and cheer on Bunning for President.
Write to your representatives. Urge action, cooperation and innovation.
Posted by: progressive mama | February 26, 2010, 8:04 pm 8:04 pm
I think I like it better when the Vice President “doesn’t do anything”.
Posted by: Woody | February 26, 2010, 9:53 pm 9:53 pm
“Write to your representatives. Urge action, cooperation and innovation.”
liberal mama, you’re assuming I haven’t.
“who have always had a better record on helping the middle class”
You have proof, of course. Or is it just something everyone knows.
Posted by: For The Record | February 26, 2010, 10:26 pm 10:26 pm
you’re assuming I haven’t.
—
Yes, and I still am as you haven’t indicated that you have. You can call also. Maybe you have– but I know I always used to feel funny about calling till I did it a few times. It feels good to weigh in.
—
You have proof, of course. Or is it just something everyone knows.
–
Sure. Check the real wages, income data, poverty levels and size of the middle class from from the 70s, 80s, 90s, 00s. Also interesting, inflation adjusted percentage increase in after-tax household income for the top 1% and the four quintiles. Or middle class neighborhoods as a proportion of all metropolitan neighborhoods. Then cross check that with Democrat and Republican admins, Congress and policy.
I also tend to think most people are aware enough, informed enough, well-traveled enough throughout the states, to know it as in “everybody knows” but…. one in five adults in the US thinks the sun revolves around the earth, and something like one in three Texans thinks humans roamed Earth at the same time as dinosaurs, so you never know….
Posted by: progressive mama | February 26, 2010, 10:56 pm 10:56 pm
“Advisors are not compensated for steering workers into investment choices that are more profitable for financial institutions.” That is how it should be without question.
“The advice is based on an objective computer model that has been certified by an independent expert.” Nice idea, but judging independent experts and computer models that just blew up on ClimateGate, how well do you trust the government to manage this?
Bottom line – the government is sticking it’s nose under the tent of our 401(k) plans. Remember, it was in the fall of 2008 when House Democrats were discussing the merits of government taking over our 401(k) plans. They talked about taking the tax benefit away and taking over the assets in return for a miniscule fixed return.
Posted by: ConservativeWoman | February 26, 2010, 11:01 pm 11:01 pm
how well do you trust the government to manage this?
I don’t think the government will be managing it but rather, these are proposed rules/regulations dealing with (1)improving the quality and objectivity of investment advice you get when you participate in a retirement plan, and (2)setting guidelines for disclosure information.
Also, I think you misunderstand where this is coming from. NYT:
“The rule has has been in the works for a long time. According to Dallas Salisbury, chief executive of the nonprofit Employee Benefit Research Institute, which focuses on retirement issues, an investment advice provision was included in the Pension Protection Act of 2006, but the initial House and Senate versions differed, with the House version allowing a financial firm to provide advice on its own products and the Senate version pushing for an independent advice standard….This new rule is a rewrite of the provision that blends the earlier House and Senate positions. “The regulation will provide clarity of what is and is not legal.”
While there are plenty of things the political factions can disagree about, this is really one of the least controversial.
Posted by: progressive mama | February 27, 2010, 12:21 am 12:21 am
It doesn’t seem like this is going to help much. Right now, a person can go to anyone that they want to evaluate their investment option. This does not help those individuals that have no employer to provide these services. What we need in more jobs by stimulating small businesses.
Posted by: Don | February 27, 2010, 11:59 am 11:59 am