WASHINGTON – U.S. Sen. Cory Booker, (D-NJ), who has worked over the past year to advance an updated fiduciary rule, issued the following statement after the Department of Labor announced a final rule today. The new rule is designed to better protect American families from bad retirement advice by requiring retirement advisers to abide by a “fiduciary” standard—putting their clients’ best interests first. Booker joined Labor Secretary Tom Perez, and Sens. Elizabeth Warren, (D-MA), Patty Murray (D-WA), and other leaders at an event hosted by the Center for American Progress today to make the announcement.
“Those who are entrusted to provide Americans with investment advice should have a duty to put their clients first. This final rule is a common sense step forward that will help protect the retirement security of countless American families. I commend the Obama Administration and Secretary Perez for finalizing a rule that prioritizes consumer protection and good business practices,” Sen. Booker said.
The Department of Labor’s new rule seeks to require retirement advisers to put their client’s best interests first by expanding the types of retirement investment advice subject to ERISA (Employee Retirement Income Security Act). The definition of retirement investment advice has not been meaningfully changed since 1975, despite the dramatic shift in our private retirement system away from defined benefit plans and into self-directed IRAs and 401(k)s. The Department’s proposal will update the definition to better match the needs of today’s working and middle class families. Whether you are an employer trying to design a quality plan for your workers, a worker starting to save, or a retiree trying to avoid spending down your nest egg too quickly, you deserve access to quality advice, without fear that financial bias is clouding your broker’s judgment.
The Department of Labor’s new rule:
Throughout the past year, Sen. Booker has called on his Senate colleagues to join him in supporting the Department of Labor’s work to improve the fiduciary standard. Sen. Booker and his staff have met with numerous groups and organizations in New Jersey to help address the concerns of industry stakeholders who would be impacted by the finalized rule. Last February, Sen. Booker joined President Obama in announcing proposed updates to the fiduciary rule along with Senator Elizabeth Warren. In July 2015, Sens. Booker and Warren penned an op-ed in USA Today highlighting the outdated rule protecting retirement savings and the positive impact the proposed changes would have on Americans workers and retirees.