Senators Attack DoL''s 401(k) Advice Rule

Three senior members of the Senate have written to the Labor Department expressing opposition to its proposed investment advice regulation and class exemption for advice providers.

Sens. Jeff Bingaman (D-N.M.), Charles Grassley (R-Iowa) and Edward Kennedy (D-Mass.) expressed their opposition in a letter late last month. Opposition in the Senate increases the chances that Congress next year might pass new laws on 401(k) advice, overriding the much fought over advice provisions in the Pension Protection Act.

In the House, Education and Labor Committee Chairman George Miller (D-Calif.) has asked the department to withdraw its proposals.

In 2006, the PPA included compromise language that would allow providers of investments to plans to provide computer-generated advice to participants as well as advice from advisors, provided fees were kept level no matter what investments the workers went into.

"It is therefore surprising that the department has seemingly ignored much of this thoughtful debate and focused more on ways to allow investment advisers with conflicts of interest to have access to workers' retirement savings," the three senators said in their letter.