Oppose Limiting Retirement Plan Investments

Oppose Limiting Retirement Plan Investments

We need your support in opposing provisions in the House Ways and Means Committee’s mark-up of the $3.5T Build Back Better Act – provisions that would unnecessarily limit the investment choices that retirement plan sponsors and investment advisers may consider for retirement savings accounts.

Specifically, we’re urging Congress to reconsider those provisions of the Build Back Better Act, including  “investment requirements” for auto-enrollment IRA accounts that would substitute the investment views of Congress and regulators for those of plan sponsors and the investment advisers they employ.

Subtitle B, Sec. 131101(a)(5) would restrict the options the IRA can offer participants as an alternative to the default option of a life-cycle and target date fund to:

  1. a class of assets or funds that is designed to protect the principal of the individual on an ongoing basis
  2. a balanced fund
  3. any other class of assets or funds determined by the Secretary of Treasury to be a qualified investment.

Under the legislation, no other investment options may be offered.

We must tell Congress that investors’ interests and the markets are adversely affected by laws and regulations that limit investor choices or the tools available to plan sponsors or investment advisers to help investors meet their goals. We must also impress upon them that law and regulation should not favor one strategy or vehicle over another, or implicitly favor passive management strategies over active strategies.

Urge lawmakers to amend the Build Back Better Act so it does not inadvertently impair taxpayers’ ability to save for retirement and meet their financial goals.

Investment advisers can use the IAA’s Contact Congress tool to send our message to their legislators without delay. The IAA has created a letter that you can send as is, or customize to your liking, that the tool will automatically send via email to your legislators.

The IAA strongly supports tax and retirement policy that bolsters Americans’ ability to save and invest for retirement, including efforts to increase participation in the retirement system by expanding access to retirement plans. The IAA believes that such policies should incentivize investors to save for retirement and to gain access to fiduciary advice.  We oppose policies that would unfairly raise costs for retirement savers. We also believe that investors should have access to the wide range of investment strategies they want and need to meet their retirement investing goals.

Those with questions about the legislation should contact IAA Vice President, Government Relations Neil Simon.