{"id":620987,"date":"2024-05-19T00:45:58","date_gmt":"2024-05-18T21:45:58","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/five-things-to-know-about-bidens-controversial-retirement-rule\/"},"modified":"2024-05-19T00:45:58","modified_gmt":"2024-05-18T21:45:58","slug":"five-things-to-know-about-bidens-controversial-retirement-rule","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-bidens-controversial-retirement-rule\/","title":{"rendered":"#Five things to know about Biden\u2019s controversial retirement rule"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a291bf2afe4f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a291bf2afe4f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-bidens-controversial-retirement-rule\/#How_the_rule_works\" >How the rule works \u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-bidens-controversial-retirement-rule\/#Key_part_of_the_Biden_%E2%80%98junk_fee_agenda\" >Key part of the Biden \u2018junk fee\u2019 agenda\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-bidens-controversial-retirement-rule\/#Why_liberals_and_industry_critics_support_it\" >Why liberals and industry critics support it\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-bidens-controversial-retirement-rule\/#Why_Manchin_Republicans_and_industry_oppose_it\" >Why Manchin, Republicans and industry oppose it<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/five-things-to-know-about-bidens-controversial-retirement-rule\/#The_latest_chapter_in_a_decade-long_fight\" >The latest chapter in a decade-long fight\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<figure><img decoding=\"async\" src=\"https:\/\/media.zenfs.com\/en\/aol_the_hill_articles_315\/0bad7faac3c2a9a2c353bb57b9d7d0a2\" data-uuid=\"f27db132-3b21-33a0-bfa7-015c1ed3a339\"><figcaption><\/figcaption><\/figure>\n<p>The Biden administration finalized a rule cracking down on retirement advice last month that one Democrat and Republicans are already pushing to overturn.<\/p>\n<p>Here\u2019s what you need to know about the Retirement Security Rule:\u00a0\u00a0<\/p>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_the_rule_works\"><\/span><strong>How the rule works <\/strong>\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The rule, finalized last month by the Labor Department, requires investment advisers to provide \u201cprudent, loyal, honest advice free from overcharges\u201d and avoid recommendations that favor their interests at the expense of their clients.\u00a0<\/p>\n<p>It also updates the definition of an investment advice fiduciary under the Employee Retirement Income Security Act (ERISA) and Internal Revenue Code.\u00a0<\/p>\n<p>Under the new definition, a fiduciary includes any financial services provider who offers investment advice to a retirement investor for a fee and who claims to be acting as a fiduciary or who a reasonable investor understands to be a trusted adviser acting in their best interest.\u00a0<\/p>\n<p>The update removes the requirement that fiduciaries provide advice on a regular basis, bringing one-time advice under the rule.\u00a0<\/p>\n<p>The Biden administration has argued that the previous definition, which was written in 1975, is outdated and has not kept pace with changes to the retirement landscape.\u00a0<\/p>\n<p>\u201cThese new rules update regulations created nearly a half-century ago that simply are not providing the protections America\u2019s workers need and deserve for their retirement savings so that they can retire with dignity,\u201d Lisa Gomez, assistant secretary for Employee Benefits Security, said in a statement when the rule was finalized last month.\u00a0<\/p>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_part_of_the_Biden_%E2%80%98junk_fee_agenda\"><\/span><strong>Key part of the Biden \u2018junk fee\u2019 agenda<\/strong>\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The rule comes as part of the Biden administration\u2019s larger effort to crack down on so-called \u201cjunk fees.\u201d\u00a0<\/p>\n<p>\u201cRetirement funds are often the largest savings that people have,\u201d acting Labor Secretary Julie Su said at an event unveiling the proposed retirement rule last October.\u00a0<\/p>\n<p>\u201cThey deserve to know that their financial advisors are giving them trustworthy advice and that the investment savings they\u2019ve worked so hard to build, little by little, paycheck by paycheck, year after year, aren\u2019t being eaten away by junk fees.\u201d\u00a0<\/p>\n<p>The White House Council of Economic Advisers (CEA) pointed to the potential losses incurred by investors who are encouraged to rollover their retirement savings into fixed index annuities.\u00a0<\/p>\n<p>Fixed index annuities, which are based on a particular market index, place a floor on losses and a cap on returns for investors.\u00a0\u00a0<\/p>\n<p>These annuities may offer commissions to brokers for their sales, which the CEA suggested can create \u201cstrong incentives for brokers to encourage investment in fixed index annuities even if they are not in investors\u2019 best interests.\u201d\u00a0<\/p>\n<p>The CEA estimates that as much as $5 billion is lost annually due to \u201cconflicted investment advice\u201d on fixed index annuities.\u00a0<\/p>\n<p>\u201cMillions of Americans, especially seniors, are being targeted by financial advice and insurance brokers selling bad annuities that work for the broker and not for the client,\u201d President Biden said in October.\u00a0<\/p>\n<p>The Biden administration has sought to limit \u201cjunk fees\u201d across several industries, including banking and air <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">travel<\/a>.\u00a0\u00a0<\/p>\n<p>In March, the Consumer Financial Protection Bureau (CFPB) issued a rule c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing late fees on credit card payments at $8. Last month, the Department of Transporation finalized rules requiring airlines to automatically refund passengers for canceled or significantly delayed flights and to share extra fees upfront.\u00a0<\/p>\n<p>Both efforts have been challenged in court, with a federal judge in Texas blocking the credit card late fee rule last week.\u00a0<\/p>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_liberals_and_industry_critics_support_it\"><\/span><strong>Why liberals and industry critics support it<\/strong>\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Liberals and industry critics argue that the new rule closes existing loopholes in the retirement advice industry.\u00a0<\/p>\n<p>Before the rule was finalized last month, Sen. Elizabeth Warren (D-Mass.) accused large insurance companies of \u201cpaying off\u201d retirement advisers with car leases and lavish vacations.\u00a0<\/p>\n<p>\u201cAll these advisers have to do is deliberately give you bad advice, bad advice that puts money in the pockets of these big companies,\u201d Warren said in a video on Instagram. \u201cAnd it\u2019s all perfectly legal.\u201d\u00a0<\/p>\n<p>AARP, formerly known as the American Association of Retired Persons, touted the final rule for closing such \u201clegal loopholes.\u201d\u00a0\u00a0<\/p>\n<p>\u201cThis rule closes legal loopholes that allowed some advisors to recommend investments with excessive fees and unnecessary risks, which collectively cost retirement savers billions of dollars a year, particularly affecting older Americans,\u201d Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer, said in a statement.\u00a0<\/p>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Manchin_Republicans_and_industry_oppose_it\"><\/span><strong>Why Manchin, Republicans and industry oppose<\/strong> <strong>it<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Earlier this week, Sen. Joe Manchin (D-W.Va.) and 15 Republican senators introduced a resolution to overturn the retirement rule, arguing that it would cause people to \u201close access to investment advice due to how broadly the rule defines fiduciary.\u201d\u00a0<\/p>\n<p>\u201cThis Department of Labor rule is yet another example of dangerous federal overreach,\u201d Manchin said in a statement. \u201cWhile I understand the Administration\u2019s intent to protect Americans\u2019 retirement savings, the truth of the matter is this does the exact opposite.\u201d\u00a0<\/p>\n<p>Several industry groups \u2014 including the American Council of Life Insurers (ACLI), the National Association of Insurance and Financial Advisors (NAIFA), Finseca, the Insured Retirement Institute (IRI) and the National Association for Fixed Annuities (NAFA) \u2014 have also come out against the rule.\u00a0<\/p>\n<p>They argue that it \u201cleaves retirement savers with fiduciary advisors as their only option for professional financial guidance,\u201d noting that fiduciaries typically work with clients who have at least $100,000 to invest.\u00a0<\/p>\n<p>\u201cThe Department chose to move forward with this fiduciary-only approach despite strong evidence of its adverse impact on retirement savers,\u201d NAIFA CEO Kevin Mayeux said in a statement.\u00a0<\/p>\n<p>The industry groups also allege that the new rule is \u201cnothing more than a repackaging\u201d of earlier regulations that were struck down in court.\u00a0<\/p>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_latest_chapter_in_a_decade-long_fight\"><\/span><strong>The latest chapter in a decade-long fight<\/strong>\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Biden administration\u2019s rule represents the latest attempt to enact the fiduciary rule after more than a decade of partisan battles.\u00a0\u00a0<\/p>\n<p>The saga stems from the 2010 Dodd-Frank Act, which ordered the Securities and Exchange Commission (SEC) to write regulations for broker-dealers and investment advisers.\u00a0\u00a0<\/p>\n<p>However, as the commission dragged its feet, the Labor Department stepped in and proposed its own rule in 2016.\u00a0<\/p>\n<p>Like the latest rule, the Obama-era regulations imposed a \u201cfiduciary duty\u201d on retirement investment advisers, requiring them to put the interests of their clients ahead of their own.\u00a0<\/p>\n<p>Several major industry groups sued the Obama administration, arguing that the regulations should have come from the SEC. A federal appeals court ultimately struck down the rule in 2018.\u00a0\u00a0<\/p>\n<p>In 2019, the Republican-controlled SEC approved several measures aimed at enhancing and clarifying rules on broker-dealers and investment advisers while limiting conflicts of interest.\u00a0<\/p>\n<p>However, the move was criticized by Democrats and consumer advocacy groups, who dismissed the regulations as too weak.\u00a0<\/p>\n<p>             For the latest <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>, weather, sports, and streaming video, head to The Hill.                <\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN63nwsw68G3Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/business\/4671172-five-things-to-know-about-bidens-controversial-retirement-rule\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Biden administration finalized a rule cracking down on retirement advice last month that one Democrat and Republicans are already pushing to overturn. Here\u2019s what you need to know about the Retirement Security Rule:\u00a0\u00a0 How the rule works \u00a0 The rule, finalized last month by the Labor Department, requires investment advisers to provide \u201cprudent, loyal,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":620988,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/media.zenfs.com\/en\/aol_the_hill_articles_315\/0bad7faac3c2a9a2c353bb57b9d7d0a2","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-620987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/620987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=620987"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/620987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/620988"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=620987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=620987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=620987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}