Working people saving for retirement are losing billions

 

The fiduciary rule is an Obama-era regulation that protects Americans’ hard-earned retirement savings by requiring that financial professionals offering retirement investment advice put their clients’ interests first. The rule was supposed to be implemented on April 10, 2017. But the Trump administration has repeatedly delayed enforcement of the rule, most recently to July 1, 2019, and is using the rule-making process and delays to significantly weaken the rule.

Because of the enforcement delays, industry actors presenting themselves as neutral advisers can continue to steer retirement savers to products with high fees and commissions that benefit the advisers but reduce net returns for the client. The map shows the annual costs retirement savers in each state incur due to underperforming IRA assets that are invested in products for which savers received “conflicted” advice (that is, advice provided by financial advisers whose earnings depend on the actions taken by the client).1

EPI has used the data on annual losses to retirement savers from conflicted advice to estimate that an August 2017 Department of Labor directive delaying the rule for 18 months, to July 1, 2019, would cost workers saving for retirement $10.9 billion dollars over the next 30 years.

1. Underperformance of investment returns in which savers received conflicted advice can be attributed to a wide range of factors, including high fees, high trading costs, poor market timing, and increased risk exposure without increased returns.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

Stay out of the TPP

From the AFL-CIO

Working people want to move forward on trade, not backward. President Donald Trump’s reported interest in reviving the Trans-Pacific Partnership is the wrong idea. He should focus on upgrading the protections for worker freedoms in the ongoing negotiations over the North American Free Trade Agreement.

Three years ago, a united movement of working people rose in opposition to Fast Track and the Trans-Pacific Partnership, upsetting the conventional wisdom and changing the course of American trade policy.

Our opposition had nothing to do with political parties. It was a grassroots groundswell, and it came after years in which trade experts from the AFL-CIO and our member unions offered feedback, detailed testimony and policy language to the trade negotiators, who simply allowed corporations to have too much control over the proposed deal.

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Tax Day Fact

Tax Day Fact