Industry Backs Agent Investment Advice Leg.

By Steven Brostoff, Washington Editor

NU Online News Service, March 4, 4:05 p.m.EST?Insurance groups are strongly backing legislation thatwould allow agents and companies that provide services to pensionplans to also offer investment advice to plan participants.

The legislation, H.R. 1000, would ease the fiduciary standardsof the Employee Retirement Income Security Act to allow pensionservice providers to offer investment advice, subject to strictdisclosure requirements.

Rep. John Boehner, R-Ohio, chairman of the House Committee onEducation and the Workforce, introduced the legislation.

"Congress needs to amend outdated ERISA provisions that bar theparties best equipped to advise employees from providing investmentadvice," said Frank Keating, president of the Washington-basedAmerican Council of Life Insurers.

These parties, he said, include financial services firms thatare already providing services and products to plan sponsors.

Maria Berthoud, senior vice president of government affairs forthe Alexandria, Va.-based Independent Insurance Agents and Brokersof America, praised Rep. Boehner for bringing the issue ofinvestment advice to the forefront of the national debate.

IIABA, she said, will be monitoring the legislation to make sureit stays on track.

Legislation similar to H.R. 1000 passed the House last year by a255-163 vote. However, the Senate never took it up.

In addition to expanding investment advice, the legislationwould give participants greater freedom to diversify their pensionplans and require plan sponsors to give participants quarterlystatements about their accounts, including the value of theirassets.

Rep. Boehner said that the legislation is necessary in light ofthe corporate scandals, such as Enron, that emerged over the pasttwo years.

"In order to prevent more massive losses to 401(k) accounts inthe aftermath of an Enron-like collapse, Congress' first prioritymust be providing workers with new pension protections," he said ina statement. "Workers around the country are waiting for us to acton these long-overdue reforms."

Rep. Boehner added, "Expanding worker access to professionalinvestment advice and giving workers new rights to diversify their401(k) portfolios are key components of our retirement securityagenda."

Labor Secretary Elaine Chao said in a statement that the Bushadministration supports H.R. 1000.

"We have got to do all we can to strengthen the confidence ofthe American workforce that their retirement savings will be secureand protected," she said.