Date: 2001-11-14
Speaker: SAM JOHNSON (republican)
Chamber: H
State: Texas

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. first of all. the process is entirely voluntary for the employees. The workers have full control over their investment decisions. not the investment advisor. H.R. 2269 does not require any employer to contract with an investment advisor. and no employee is under any obligation to accept or follow any of the advice. Furthermore. it requires financial service providers to fully disclose their fees and any potential conflict because investment advice may be offered only by fiduciary advisers. qualified entities that are already fully regulated under other Federal and State laws. The courts have consistently held that fiduciary duty is the highest form of financial responsibility to which an investment advisor can be held under the law. This bill authorizes. contrary to what the gentleman tried to imply. the individual participant and the Department of Labor can seek both criminal and civil penalties for infractions of such fiduciary duty. Comprehensive disclosure will inform participants of any financial interest advisors may have. the nature of the advisors affiliation. if any. and any limits that may be placed on the advisors ability. Mr. Speaker. it is a privilege to serve as the chairman of the Subcommittee on EmployerEmployee Relations under the wing of the gentleman from Ohio . and I am also the only Member of the House on both committees. I am pleased to report that both committees have passed this bill. and it was passed with bipartisan suport. Now. more than ever. economic security goes hand in hand with retirement security. People are concerned when they watch their nest egg dwindle. Russell Morgan. a defined contribution consultant at Watson Wyatt Worldwide in Dallas. a management consulting firm. said "Employees are having a tough time doing it on their own. For those who choose poorly. retirement may not be an option." That is just plain wrong. It is obvious that people need investment advice and they need it now. This bill does just that. This measure removes the obstacles for employers to provide millions of workers access to professional investment advice. The bill requires financial service providers to fully disclose their fees and any potential conflicts. as I said before. This bill protects people from flybynight groups or people trying to make a quick buck. There are a number of safeguards. One. under this bill. sound investment advice can only be offered by fiduciary advisors. qualified entities that are already fully regulated under other Federal and State laws. Courts have consistently held that fiduciary duty is the highest form of financial responsibility to which an investment advisor can be held under the law. Two. this bill authorizes the individual plan participant and the Department of Labor to seek both criminal and civil penalties for infractions of fiduciary duty. Three. comprehensive disclosure will inform participants of any financial interest. outside interest. that advisors may have. The nature of the advisors affiliation. if any. with the available investment options. and any limits that may be placed on the advisors ability to provide advice. these types of disclosure obligations. along with fiduciary duties. have worked well in regulating the conduct of advisors under Federal security laws for more than 60 years in protecting innocent people from scams and fraud. Both committees have worked hard to take a balanced approach to increasing access to advice while including safeguards to protect employers and employees. Without this bill. employees will continue to fend for themselves in todays rollercoaster market when it comes to planning their retirement. Help people who want to help themselves and vote for this bill. It is the right thing to do. Mr. Speaker. I reserve the balance of my time.