Introduction Of The Conflicted Investment Advice Prohibition Act Of 2009
* Mr. ANDREWS. Madam Speaker, I rise today to introduce the ``Conflicted Investment Advice Prohibition Act of 2009, CIAPA, which would restore the Employee Retirement Income Security Act's, ERISA, prohibition on self-interested investment advisers providing advice to employer-sponsored retirement accounts; thereby, safeguarding the retirement savings of millions of hardworking Americans.
* On the eve of the inauguration of President Barack Obama, the Bush administration attempted to finalize a regulation concerning the Employee Retirement Income Security Act, ERISA, that raised substantial questions of law and policy. Essentially, the final rule issued would have allowed conflicted financial advice to workers with regard to their 401(k) and other types of defined contribution plans. Fortunately, thanks to letters of opposition from Chairman Miller and me, as well as several other Members of Congress, as well as consumer advocacy groups and several financial industry insiders who serve in the interest of investors, the Obama administration has delayed the effective date of the regulation for further examination of its intent.
* I believe in the value of providing American workers with access to investment advice, so long as the advice is independent and free from conflict--serving in the interest of the worker, rather than the interest of the financial advisor. During a time where American workers have already lost $2 trillion in assets due to last year's market downturn, exposing their hard-earned retirement savings to greater risk by allowing advisers to offer them conflicted advice is irresponsible and imprudent. During consideration of the Pension Protection Act of 2006, many of my colleagues were well intended with respect to ensuring that if workers were to receive investment advice with respect to their retirement savings, it would be independent. Despite their good intentions, the process of the bill's consideration created a statutory loophole; at the end of the regulatory process, conflicted advice could be offered to workers.
* In lieu of exposing workers to conflicted investment advice, CIAPA would permit independent investment advisers to provide advice to workers regarding their retirement goals. Furthermore, it would maintain the allowance of the computer model arrangement so long as an independent expert or agency certifies the model.
* I strongly encourage my colleagues to cosponsor and support the Conflicted Investment Advice Prohibition Act of 2009.