The Biden-Harris administration announced the Department of Labor’s finalized Retirement Security Rule, aiming to protect workers saving for retirement by updating the investment advice fiduciary definition under ERISA and the Internal Revenue Code. The rule will become effective on Sept. 23, 2024, with some exemptions taking effect in September 2025.
Acting Secretary Julie Su highlighted the rule’s emphasis on unbiased advice and protecting retirement investors from conflicts of interest, estimating potential savings of up to $5 billion annually for investors. Despite opposition from insurance organizations like IRI and ACLI, who argue the rule is redundant given existing regulations like SEC Reg BI and NAIC’s best interest model, the DOL defends its approach as necessary for consumer protection.
The insurance industry is expected to challenge the rule, expressing concerns about increased costs and reduced access to retirement planning assistance. ThinkAdvisor reports potential revenue cuts for annuity agents, brokers, and advisors, impacting about 1,577 career insurance agents, 86,410 independent agents and brokers, and 16,398 registered investment advisors, with an estimated industrywide revenue reduction of $325 million to $530 million per year over the next decade.
