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Prof. Norman Stein Calls for End to Conflicts of Interest in Investment Advice

"ERISA says unambiguously that people and firms that give investment advice to people in retirement plans are fiduciaries and that fiduciaries cannot generally have disabling conflicts of interest. This is not a new idea. It has been the law for close to half a century. But in 1975 the [DOL] adopted a regulation that artificially constricted the meaning of investment advice.... Well, the world in 1975 was a very different world than it is today. Steve Jobs was still tinkering in his dad's garage, e-mail meant mail in envelopes, Jennifer Aniston was in first grade, and more pertinent, the 401(k) plan had not yet been invented and only a few thousand individual retirement accounts had been opened."

Text of Testimony on Behalf of Pension Right Center to ERISA Advisory Council: Outsourcing Employee Benefit Plan Services (PDF)

8 pages. "[There exist] some gaps in the current regulatory framework -- which ... date back to a part of 1975 interpretative bulletins -- that could be filled by new Department of Labor guidance updating those early bulletins. [Of particular concern are] outsourcing arrangements that many people today think eliminate or at least reduce the fiduciary protections that the statute nominally purports to extend to participants. It revisits first regulatory principles for ERISA, which is appropriate as retirement and other employee benefit plans have evolved since ERISA's first decade."

Text of Testimony on Behalf of Pension Right Center to ERISA Advisory Council: Issues and Considerations Around Facilitating Lifetime Plan Participation (PDF)

"[1] Why do plan participants withdraw money? ... [2] Factors that Participants Should Consider in Deciding Whether to Rollover ... [3] Employer Attitudes Toward Plan Withdrawals ... [4] Steps employers can take to discourage pre-retirement consumption of plan assets and to encourage good financial decision making in deciding between a rollover or keeping assets in a plan (without incurring potential fiduciary exposure) ... [5] Possible Department of Labor Actions."