House Panel Approves 401(k) Fee Disclosure Bill

The House Education and Labor Committee on June 24 approved legislation aimed at giving investors more information about fees that are charged to their 401(k) retirement plans. By a vote of 29-to-17, lawmakers approved the 401(k) Fair Disclosure and Pension Security Bill (HR 2989). The legislation is designed to provide employees with more information about fees taken from their retirement plans, and more options when they choose their investment plans. Rep. George Miller, D-Calif., chairman of the Education and Labor Committee, said the bill is a response to employee worries about the value of their retirement plans during the current economic recession.

The legislation would require retirement plans to give investors a quarterly statement that includes a dollar figure representing all fees taken from their 401(k) plan. Service providers and plan administrators would be required to categorize fees as administrative fees, investment management fees, transaction fees and other fees. The measure would also require service providers to disclose any financial relationships so that companies that sponsor 401(k) plans can make sure there are no conflicts of interest.

A spokesman for the Education and Labor Committee said Miller will determine the next step for the legislation after consulting with the House Ways and Means Committee, which also has jurisdiction over 401(k) plans. Meanwhile, a similar bill, introduced by Senate Special Committee on Aging Chairman Herb Kohl, D-Wis., and Sen. Tom Harkin, D-Iowa, is pending in the Senate. Their bill, the Defined Contribution Fee Disclosure Bill (Sen 401), would require a 401(k) plan to provide a written statement of services provided, as well as the expected total annual service charge.

By Stephen K. Cooper, CCH News Staff

401(k) Fair Disclosure and Pension Security Act of 2009, HR 2989

Defined Contribution Fee Disclosure Act of 2009, Sen 401