Left Turns

The Department of Labor has spent years crafting a regulatory proposal that would make it harder for low- and middle-income workers to plan and save for retirement. So some may be perplexed by a new effort underway at the department—one that’s hardly been noticed and casts fresh doubts over the department’s attempt to curtail access to affordable retirement advice.

The department announced it would assemble a panel to collect data on how “retirement planning strategies and decisions evolve over time.” In their announcement, buried in the Federal Register, the department states:

Relatively little is known about how people make planning and financial decisions before and during retirement. A major hurdle to retirement research is the lack of data on how people make these decisions related to retirement.

Seems odd. An initiative to “gain insight” into how people make retirement decisions comes a full 10 months after the department released its latest proposal that would drastically alter retirement planning and have significant consequences for working families. The proposed rule would:

• Severely restrict the ability of individuals to receive some of the most basic financial advice, such as assistance in rolling over funds from a 401(k) to an IRA;
     
• Deny many small business owners the help they need to offer their employees a retirement plan;
     
• Impose more than $2 billion in additional costs each year on retirement advice—costs that will ultimately be passed on to working families; and
     
• Make it harder, if not impossible, for low- and middle-income families to access affordable retirement advice.

Since April, when the department proposed its latest plan regulating retirement advice, members from both sides of the aisle have raised concerns about the costly consequences of the proposal. During this time, the department has stayed silent about whether or not it will address any of the bipartisan concerns that have been raised. Meanwhile, we’ve learned the department is pushing a flawed rule through a flawed regulatory process.

And now the department suggests it doesn’t completely comprehend the problem it’s trying to address. In the department’s own words, they know “relatively little” about how working families make planning and financial decisions for retirement. Yet they continue to move forward, taking a shot in the dark on a “solution” to a problem—they now admit—they don’t fully understand.

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