Legislation that would amend the Employee Retirement Income Security Act (ERISA) which would prohibit certain entities that have some relationship with a retirement plan involving a plan's investments from providing investment advice for participants and beneficiaries under individual account plans was introduced this week. The Conflicted Investment Advice Prohibition Act of 2009 (H.R. 1988) would add a paragraph to ERISA defining and outlining specific qualifications and requirements for an “independent investment advisor” with respect to an individual account plan. If this bill becomes law, it is possible that a huge number of existing relationships between plans and investment providers would need to be abrogated.

According to Rep. Robert Andrews (D-NJ) who introduced the bill, the purpose of this legislation is to “restore ERISA’s prohibition on self-interested investment advisers providing advice to employer-sponsored retirement accounts, thereby safeguarding the retirement savings of millions of hardworking Americans.”

This bill has been referred to the House Committee on Education and Labor.