Senate to Vote on Bill Allowing 401(k) Advice

The Senate is expected to vote on the pension reform bill this week that the House of Representatives approved on Friday.

The bill would allow 401(k) administrators to offer investment advice directly, but the recommendations must be based on a computer model that an independent advisor audits. The bill also encourages employers to automatically enroll workers in their 401(k) plan, and it would make higher contribution limits to both 401(k)s and IRAs permanent, and make the tax incentives in 529 plans permanent, as well.

While the measure overwhelmingly passed the House, it is expected that provisions to cut the estate tax and increase the minimum wage could hold it up in the Senate.

The Investment Company Institute issued a statement yesterday encouraging the legislators to pass the measure, saying, "The reforms would significantly strengthen the retirement security and education preparedness of millions of workers and families."