The Investment Company Institute will lobby in favor of legislation introduced Friday that would enable 401(k) investors to get advice about their retirement savings, the industry group announced. Under decades-old legislation, known as the Employee Retirement Income Security Act of 1974, companies are not allowed to provide advice to investors about their 401(k)s.

The legislation currently pending, known as the Retirement Security Advice Act, was introduced Friday by Rep. John Boehner (R-Ohio). It would allow companies to provide 401(k) investors with advice about which mutual funds and other investments best suit their needs, said Chris Wloszczyna, an ICI spokesman. In a statement released Friday, ICI President Matthew Fink said investors must bear the risk of the decisions they make in their 401(k) plans, so it makes sense that they should be allowed to receive advice regarding those plans. Such advice would be provided through 401(k) plan sponsors, said Scott Galupo, a spokesman for the House committee on Education and the Workforce where the legislation originated. Galupo said he did not know of any plans for companies to charge for financial planning advice and therefore saw no indication that passage of the act could drive up overhead expenses for retirement plans. Boehner hopes the legislation will pass the house by the end of summer, Galupo said.

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