Last week, the Department of Labor finalized its “fiduciary rule,” imposing a series of mandates that will drastically alter how Americans plan for retirement. After reviewing the rule, Ways and Means Committee Chairman Kevin Brady (R-TX) and Oversight Subcommittee Chairman Peter Roskam (R-IL) said, “We continue to have serious concerns.” Here’s why:

1. The Administration’s new rule could discourage small businesses from offering 401(k) plans.

Small businesses purchase a variety of retirement products and services in order to offer retirement plans to their employees. Unfortunately, under the final fiduciary rule, small businesses will have to pay significantly more for the products and services needed to help their employees save for retirement. As such, many small businesses may be forced to forgo offering retirement plans to their employees.

2. The Administration’s new rule could make it harder for low- and middle-income families to save for retirement.

The final fiduciary rule is expected to increase the cost of retirement advice because financial advisors will have to comply with unnecessarily onerous rules. This will make it more difficult for many low- and middle-income families to access the support they need to plan for retirement and could cause families to stop saving for retirement altogether.

3. The Administration’s new rule could stifle private retirement plans and limit personal choice.

The heavy burdens imposed by the final fiduciary rule could result in fewer Americans saving for retirement using private sector vehicles such as 401(k)s and IRAs. Instead, the Administration is promoting government-run plans that would not be subject to the fiduciary rules. The Administration would strong-arm private businesses into enrolling their employees in these government-run plans through additional mandates. Ultimately, this will stifle individual choice and empower government bureaucrats to make decisions on behalf of those saving for retirement. Proponents of these government-run plans tout them as “Obamacare for retirement.”

4. The Administration’s new rule could prevent pension plans from investing in the best interests of workers and retirees.

The final fiduciary rule expands the definition of who is a “fiduciary” and imposes strict rules on them, raising costs and limiting access to retirement advice for Americans. The Administration also reversed the long-standing and basic fiduciary rule that requires fiduciaries to invest solely in the best interest of their clients, and instead requires pension plans to consider environmental, social, and governance factors when investing on behalf of workers and retirees.

5. The Administration’s new policies could discourage financial professionals from offering retirement advice.

The tax code delegates to the Department of Treasury sole enforcement authority over IRAs, recognizing that private lawsuits are inefficient, inexpensive, and often do not have the best interests of the clients in mind. The final fiduciary rule, however, allows for – even encourages – IRA rules to be enforced through class action lawsuits. Not only does this change exceed the Administration’s regulatory authority in this area — once again highlighting this Administration’s habit of executive overreach — it also is expected to create needless and expensive litigation, scare off potential retirement advisors, and make it harder and more expensive for Americans to obtain retirement advice.

As Chairmen Brady and Roskam said last week following the Department of Labor’s announcement of the fiduciary rule, “We remain committed to using the tools we have to help all Americans retire with the financial security and peace of mind they need.” That’s why they, along with leaders on the Education and the Workforce Committee, advanced complementary legislative proposals to strengthen retirement security, expanding fiduciary protections without harming working families and small businesses.

The Strengthening Access to Valuable Education and Retirement Support (SAVERS) Act, sponsored by Rep. Roskam, and the Affordable Retirement Advice Protection Act, sponsored by Rep. Roe, would together raise investment advice standards for the retirement industry to ensure financial advisors act in the best interests of their clients. These bipartisan bills, which were reported by the Committees earlier this year, would ensure low- and middle-income Americans have access to quality, affordable financial advice to help plan for retirement.

For more information about the legislation, click here.