Barrasso Introduces Legislation to Modernize Retirement Savings Regulations

WASHINGTON, D.C. - Today, U.S. Senator John Barrasso (R-Wyo.) introduced legislation to simplify and modernize regulations for Individual Retirement Accounts (IRAs). The Simplifying Modern Access to Retirement Tools for Savings (SMART Savings) Act will make it easier for Americans to save for retirement.

"Washington red tape shouldn't prevent Americans from saving for their retirement. People need to be able to save in the way that works best for them. Outdated and unnecessary federal rules create uncertainty and make it harder for financial advisors to serve retirement savers," said Senator Barrasso. "The SMART Savings Act reverses that regulatory overreach. It gives Americans with personal retirement accounts access to the same rates and services that are already available through other retirement options."

The SMART Savings Act is co-sponsored by U.S. Senator Marsha Blackburn (R-Tenn.). Representative Claudia Tenney (R-N.Y.) introduced companion legislation in the U.S. House of Representatives.

"Hardworking New Yorkers who are saving for retirement deserve every opportunity to keep more of their own money," said Congresswoman Tenney. "Our retirement system should encourage Americans to save, not burden them with outdated regulations that drive up costs. The SMART Savings Act modernizes these rules so families can keep more of their hard-earned retirement savings."

The legislation is supported by the National Association of Insurance and Financial Advisors (NAIFA), the Securities Industry and Financial Markets Association (SIFMA), Finseca, the Insured Retirement Institute (IRI), the National Association for Fixed Annuities (NAFA), the Financial Services Institute (FSI), and the Investment Company Institute (ICI).

"Senator Barrasso's SMART Savings Act delivers exactly what Wyoming retirement savers need: simpler rules, lower costs, and strong protections. NAIFA Wyoming stands firmly behind our national association in supporting this bill, and we're proud it's a Wyoming Senator leading the charge," said Kendall Bryce, Director of NAIFA Wyoming.

"NAIFA members across the country work with retirement savers every day and strongly applaud the introduction of the SMART Savings Act. This important legislation will simplify access to retirement savings tools, reduce unnecessary complexity and costs, and deliver strong consumer protections for American families," said Christopher Gandy, President of NAIFA.

"SIFMA applauds Senator Barrasso, Congresswoman Tenney, and Senator Blackburn for introducing this important legislation to modernize the outdated regulatory framework governing Individual Retirement Accounts (IRAs). Today's rules treat IRAs the same as employer-sponsored plans despite very different oversight in practice, adding needless cost and complexity for the millions of Americans who rely on IRAs to save for retirement. By modernizing the treatment of IRAs in the Internal Revenue Code, this legislation would allow for improved investment opportunities for individuals while preserving a clear prohibition on self-dealing and maintaining robust investor protections under the SEC, FINRA, state regulators, and FinCEN. We look forward to working with Congress to advance this legislation and ensure American workers and retirees have access to lower-cost, better-informed investment options as they save for their future," said Kenneth E. Bentsen, Jr., President and CEO of SIFMA.

"Finseca strongly supports legislation to prevent the Department of Labor from resurrecting another harmful fiduciary rule that would restrict access to advice. Americans working to secure their financial future need more access not new barriers that reduce choice. This bill helps protect families by preventing harmful regulatory overreach, safeguarding consumer choice, and ensuring financial security professionals can continue delivering the holistic planning that drives real results for the individuals and families they serve-results proven by independent Ernst & Young research," said Marc Cadin, CEO of Finseca.

"NAFA, the National Association for Fixed Annuities, applauds Senator Barrasso and Congresswoman Tenney for their leadership in sponsoring The Simplifying Modern Access to Retirement Tools for (SMART) Savings Act. This important legislation brings greater clarity and consistency to IRA regulation by eliminating duplicative oversight while preserving the strong investor protections already provided by the SEC, FINRA, and state regulators. By reducing unnecessary regulatory barriers, the SMART Savings Act will help financial professionals better serve retirement savers and expand access to more competitive products and services, allowing Americans to make the most of their hard-earned retirement savings," said Chuck DiVencenzo, President and CEO of NAFA.

"Senator Barrasso and Representative Tenney are championing Americans' retirement savings with the legislation they have introduced today. The SMART Savings Act will alleviate burdensome and unnecessary retirement regulations while preserving important safeguards for retirement investors. ICI welcomes this bill as an important step towards a more secure financial future for millions of Americans," said Eric J. Pan, President and CEO of ICI.

"The SMART Savings Act would fix a decades-old mismatch that has kept retirement savers from receiving benefits available in every other retirement account they hold, at real cost to the independent financial advisors who serve them. FSI commends Senator Barrasso and Congresswoman Tenney for advancing a targeted solution that expands access to advice and services without weakening a single protection against self-dealing," said Dale Brown, President and CEO of FSI.

Background:

More than 60 million American households use IRAs to save for the future. However, these accounts are needlessly subject to overlapping federal rules, including "prohibited transaction" provisions in the Tax Code that have not been significantly updated in more than 50 years and are enforced by the Department of Labor (DOL).

Recent administrations have repeatedly used the DOL to expand this authority well beyond its original scope, including through the Obama Administration's 2016 fiduciary rule and the Biden Administration's 2024 Retirement Security Rule. This outdated and unstable framework creates uncertainty and limits the services available to savers.

The SMART Savings Act will:

• Remove IRAs from the prohibited transaction rules, eliminating duplicative DOL authority over IRAs and preventing future regulations that restrict savers' access to financial advice;
• Preserve a clear ban on self-dealing, so an IRA owner who improperly uses account assets for their own personal benefit loses the account's tax advantages; and
• Clarify that IRA savers can access reduced-cost or enhanced products and services already allowable through other types of savings accounts, without needing individual DOL exemptions.

The legislation gives financial advisors the clarity they need to serve IRA holders, while delivering everyday savers access to better rates and services available through other retirement accounts. Existing protections from state regulators, the U.S. Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and Financial Crimes Enforcement Network (FinCEN) remain fully intact.

Full text of the legislation can be found here.

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