The House of Representatives and Senate agree that 401(k) plan providers should be allowed to bundle advice in with the plan, according to House Majority Leader John Boehner, Reuters reports. Currently, plan sponsors may offer advice, but only from an outside, independent party, yet many do not do so.
"The investments that are being made in [401(k)s] are not getting the kinds of returns that American workers need if they're going to have the kind of retirement security that they expect," Boehner said. "We believe that if they got better investment advice, they'd be making better choices [and have] more diversification in their portfolios."
The legislators are not sure, however, whether to extend that to individual retirement accounts.
The provision is part of a pension reform bill that Boehner hopes will pass houses next week. It is designed to force companies to fully fund, and therefore honor, existing pensions.
There are many critics of allowing plan providers to offer advice, as they fear they would only steer investors into their own funds.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.