July 19, 2017
House Education and Workforce Committee Markup Hearing – H.R. 2823, “Affordable Retirement Advice for Savers Act”
Key Topics & Takeaways
- Approval: H.R. 2823, the Affordable Retirement Advice for Savers Act, was approved by the Committee in a 23-17 vote.
- Republican Support: Chairwoman Virginia Foxx (R-N.C.) called the Department of Labor’s (DOL) fiduciary duty rule “flawed,” “misguided,” and “unworkable,” and said millions would lose access to trusted financial advice. Rep. Phil Roe (R-Tenn.), the bill’s sponsor, said Americans deserve retirement advice that is in their best interest, but that the DOL’s rule “achieves nothing” if savers lose access to advice.
- Democratic Opposition: Rep. Suzanne Bonamici (D-Ore.) expressed opposition to the bill, stating the current rule “safeguards American savings.” Rep. Scott stated the DOL fiduciary rule should be codified into law, rather than repealed. Democratic opposition to the bill was unified.
- H.R. 2823, “Affordable Retirement Advice for Savers Act”
In her opening statement, Chairwoman Virginia Foxx (R-N.C.) said that despite decades of hard work, Americans are facing many challenges in putting enough money away for retirement. Foxx stated that savers turn to trusted financial advisors to plan for their future, and Congress should ensure that “misguided” rules do not stand in their way. Foxx argued that the Department of Labor (DOL) fiduciary duty rule is “flawed” and “unworkable,” and would cause millions to lose access to financial advisors. Foxx encouraged Congress to find a legislative solution and said the legislation being considered by the committee overturns the fiduciary rule while requiring retirement advisors to act in the best interest of their clients.
In his opening statement, Ranking Member Bobby Scott (D-Va.) expressed his opposition to the bill, saying that it “imposes a far weaker, loophole-ridden standard.” He stated the financial services industry is adapting to and complying with the rule, innovating in ways that will benefit investors. Scott expressed his support for the DOL fiduciary rule and asked his colleagues to help ensure the rule is implemented in its present form.
H.R. 2823, “Affordable Retirement Advice for Savers Act”
Rep. Phil Roe (R-Tenn.) introduced an amendment in the nature of a substitute to H.R. 2823. The amendment was adopted in a voice vote. Rep. Alma Adams (D-N.C.) introduced a Democrat substitute amendment to H.R. 2823, which was defeated in a voice vote.
Roe stated Americans deserve retirement advice in their best interest, but argued DOL fiduciary rule “achieves nothing” and could make as many as 7 million savers lose access to retirement advice. Roe emphasized that fee-based plans are out of reach or many American families. Roe highlighted that the bill does not only repeal the rule, but amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Service (IRS) code to establish a statutory definition of “financial advice.”
Rep. Joe Wilson (R-S.C.) expressed support for the bill, calling the DOL’s definition of fiduciary “incomprehensible” and stating the need for a “common sense solution” to protect access to affordable retirement advice.
Rep. Tim Walberg (R-Mich.) stated that the federal government should not create barriers to retirement savings, and that Congress should work to develop policies to help Americans save for retirement and small businesses to set up plans for their employees.
Also in support of the bill were Rep. Glenn Thompson (R-Pa.), Rep. Paul Mitchell (R-Mich.), and Rep. Tom Garrett (R-Va.).
Rep. Suzanne Bonamici (D-Ore.) expressed opposition to the bill, stating the current rule “safeguards American savings.” Bonamici said retirement plans are complex, and savers should be able to trust their advisors. Bonamici argued that instead of dismantling the rule, the Committee should focus on how to help Americans save for retirement and expand opportunities to save.
Adams introduced an amendment to codify the DOL fiduciary rule into law and strike the rest of the bill, stating that the fiduciary obligation is “paramount” to protecting clients. Adams said that because most customers are not experts in financial services, it is “simply unfair” to place the burden on the customer and return to a system where brokers can “push high-cost products.”
Rep. Mark Takano (D-Calif.) likened opposition to the fiduciary duty rule to Y2K hysteria, and said that the financial services industry has already begun complying with the rule.
Scott stated the DOL fiduciary rule should be codified into law, rather than repealed. Scott said that if savers lose access to advice due to the rule, they are “better off with no advice at all” over receiving conflicting advice.
H.R. 2823 was approved by the Committee by a vote of 23-17.
For more information on this markup, please click here.