AARP Urges Congress to Protect New Retirement Security Rule

En español | AARP is fighting back against measures introduced in the U.S. House and Senate that aim to overturn a new federal rule requiring financial professionals to put retirement savers’ interests ahead of their own.

In a letter sent to every member of Congress, we urged federal lawmakers to protect the rule on behalf of constituents who are trying to build their retirement savings.

The new regulation, known as the Retirement Security Rule, closes loopholes in 50-year-old regulations that have allowed some financial professionals to lead retirement savers toward products that charge higher commissions — and often come with high fees — rather than toward investments that are best for the client.

“When your constituents are steered to products that are not appropriate, it can cost them up to 20 percent of their nest egg — that’s $15,000 a year for the typical retirement saver,” Nancy LeaMond, AARP chief advocacy and engagement officer, wrote in the letter.

Under the rule, all financial advisers providing advice on 401(k) plans, individual retirement accounts (IRAs) and annuities will have a “fiduciary duty” to put retirement savers’ interests first, a standard that already applies to most financial professionals.

AARP and other consumer advocates pushed hard for the change, which is slated to take effect Sept. 23 but faces opposition from some in the financial services industry.

The U.S. Department of Labor finalized the rule in April but Congress has the power to repeal it under the Congressional Review Act, which provides oversight over rules issued by federal agencies.

A recent AARP survey found 9 in 10 people believe a “best interest” standard should be required of their financial advisers, LeaMond noted in the letter. “In fact, most people are shocked to learn it isn’t already a requirement, demonstrating an even greater need for the rule,” she wrote.

Read our letter and join our fight to save the retirement security rule.

Natalie Missakian covers federal and state policy and writes AARP’s Fighting for You Every Day blog. She previously worked as a reporter for the New Haven Register and daily newspapers in Ohio. She has also written for the AARP Bulletin, the Hartford Business Journal and other publications.

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