Vice President Joe Biden unveiled the Middle Class Task Force's new report on the middle class Friday, in which he outlined plans to offer automatic Individual Retirement Accounts to most Americans, provided clarification for giving advice to plan participants, and offered a proposal to allow plans to provide guaranteed retirement income products.

"The Administration recognizes that inadequate access to retirement savings plans is threatening the retirement security of workers, which is why we have proposed to lay the groundwork for a system of automatic IRAs in the workplace," the task force report said.

The proposed rules will shield workers from potential conflicts of interest related to financial advisers by allowing investment advisors and money managers to give investment advice as long as they don't get a commission for steering workers into their own funds. Advisors would be required to disclose their fees, and computer models that offer advice would have to be certified as objective and unbiased.

Essentially, this is identical to the Department of Labor’s Jan. 21, 2009 advice rule, which it later withdrew on Nov. 20, 2009, except for the certification requirement and the elimination of language referring to varying fees. DOL estimates that two million workers and 13 million IRA holders would benefit from this rule with increased investment earnings of $6 billion a year.

The second rule would establish guidelines for disclosing funding and other financial information to workers participating in multi-employer retirement plans, i.e. those collectively bargained by unions and groups of employers, so that workers can transparently monitor the financial condition of their retirement investments.

The third proposal would require employers that do not currently offer a retirement plan to enroll their employees in a payroll-deduction IRA.  Small businesses would receive tax breaks to help them set up these plans, although businesses with fewer than 10 employees would be exempt from these requirements, and all workers will be allowed to voluntarily opt out of the automatic contributions. The proposal also offers details on increased child-care tax credits and improvements to the student loan system.

The new rules are open for public comment until May 5.

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