LETTER: It's vital to protect individual retirement plans
I spent almost 30 years working as a benefits consultant and benefits manager. During that time, more and more companies switched from traditional pension plans to 401(k) plans. While 401(k)s can be an excellent vehicle for retirement savings, they do put the responsibility for investment decisions on the individual. Since most of us don’t have a lot of financial expertise, we have to rely on investment professionals for guidance.
Most of these professionals recommend investments that are in the best interest of their clients. The problem is, they don’t have to. There is a loophole in the law that allows financial advisers to recommend investments with higher fees, riskier features and lower returns because they earn more money for the adviser.
The U.S. Department of Labor is considering a new standard that would hold anyone who gives investment advice accountable for helping to choose the best investment for their clients. However, Congress is considering legislation that would make it impossible to enforce this new standard, regardless of the harm that can be done to individuals who are just trying to save for retirement.
AARP needs our help to combat this legislation. Make sure your member of Congress knows that you want your retirement savings protected. Don’t let them keep the Department of Labor from closing the loophole. Hard-working people who are doing their best to save for retirement must be able to have confidence that the investment advice they get are in their best interest.