Local

Proposed rule aims to protect Ohio’s retirees

By Nadia Ramlagan Mahoning Matters
The Biden administration unveiled the U.S. Labor Department’s proposed Retirement Security Rule, which aims to restrict “junk fees” by requiring retirement-plan advisors to sell products solely in customers’ best interests.
The Biden administration unveiled the U.S. Labor Department’s proposed Retirement Security Rule, which aims to restrict “junk fees” by requiring retirement-plan advisors to sell products solely in customers’ best interests. Adobe Stock

The Biden administration has proposed a rule to help people save more in retirement and avoid “junk” fees from unscrupulous financial advisers.

According to the White House, a financial adviser may receive a commission as high as 6.5 % to recommend some insurance products, posing a conflict of interest.

Melondia Franklin Corpus, who finally reached her retirement milestone last May after 36 years of service as an educator, said when she filed for retirement six months prior, a flood of calls and solicitation started to pour in from financial advisers pitching retirement services and plans with few details.

”One guy called me, and it was almost a pressure-sale type thing, you know,” Corpus recounted. “’This offer is only going to be good for this week,’ blah, blah, blah, blah, blah, and I’m, like, ‘No, I don’t make a commitment based on that, please send me some information, let me look at it.’”

The new proposal is intended to standardize the rules for everyone paid to offer retirement advice and sell retirement products.

A statement from the Insured Retirement Institute attacked Biden’s proposal, claiming the “fiduciary rule will harm the very consumers he wants to help and deepen the nation’s retirement crisis by limiting access to sound financial advice.”

Existing fiduciary rules from the Employee Retirement Income Security Act and the Securities and Exchange Commission do not comprehensively cover all investment products such as one-time rollovers from a 401(k) to an IRA.

Corpus contended the new protections are a step in the right direction and should be expanded to all consumers.

”An adviser should never be recommending something to any client regardless of their status based on his commission,” Corpus asserted. “I think retirees, definitely, but I think it should be across the board.”

The proposal is open for public comment for 60 days before any potential revisions are made.

This reporting was supported in part by Media in the Public Interest and the George Gund Foundation.

Read Next

CONNECT WITH US

WEB SITE ► https://www.mahoningmatters.com

DAILY NEWS EMAIL ► https://www.mahoningmatters.com/customer-service/newsletter-signup/

FACEBOOK ► https://www.facebook.com/mahoningmatters

TWITTER ► https://twitter.com/mahoningmatters

YOUTUBE ► https://www.youtube.com/@mahoningmatters2814

INSTAGRAM ► https://www.instagram.com/mahoningmatters

SUPPORT US ► https://givebutter.com/vNfzEW