Regulations proposed by the U.S. Department of Labor to protect workers and employers from conflicts of interest in retirement plans may be too broad, a JPMorgan Chase & Co. executive testified in Washington today.
"Existing standards governing plan distribution education and guidance are sufficient and need not be modified," Karen Prange, executive director and assistant general counsel at New York-based JPMorgan said at a Labor Department hearing.
Employers generally are held responsible for making sure their 401(k) retirement plans operate in the best interest of employees. The proposed Labor Department regulation would apply a fiduciary standard to those firms who advise plan sponsors about which investments to offer, for example, even if that advice is not given on a regular basis, said Assistant Secretary of Labor Phyllis Borzi in a telephone interview last week. It's designed to prevent conflicts of interest, such as the recommendation of investments with higher fees.
"The point of this regulation is to make sure that all the investment professionals that provide advice" to employers and participants are held to the same standards, Borzi said. The fiduciary standard, which generally requires advisers to put clients' interests ahead of their own, would not apply to generic information such as asset allocation charts and graphs provided to customers online, the Labor Department said.
Read the complete Bloomberg story, "Labor Department Fiduciary Rule for 401(k) Plans Too Broad, JPMorgan Says."