ICI Supports Investment Advice Provisions in Pension Legislation Passed by House

Washington, DC, April 18, 2002 - Pension legislation recently passed by the House of Representatives includes provisions that would significantly expand the investment advice available to participants in 401(k) plans, while maintaining important investor protections supported by the Institute.

Specifically, H.R. 3762, the "Pension Security Act of 2002," would subject investment advisers to rigorous fiduciary standards under ERISA and require extensive disclosures to be provided to 401(k) plan participants. Other protections provided by the legislation would require that only specifically identified, qualified entities be permitted to serve as "fiduciary advisers," any compensation relating to the advice be reasonable, and any advice provided be implemented at the direction of the advice recipient.

The Institute believes these measures will enhance access to professional investment advice from qualified financial institutions, while establishing stringent safeguards that will protect retirement plan participants.

Recently, the Institute submitted written testimony to the House Ways and Means Committee expressing its support for enhanced disclosure and efforts to facilitate the provision of educational services to participants.