The bill, H.R. 3185, which was approved in April by the House Education and Labor Committee, would require 401(k) plan administrators to disclose fees in four distinct categories: plan administrative and record-keeping charges; transaction-based charges; investments charges; and other charges as specified by the Labor Department.
Additionally, plan administrators would have to disclose any financial relationships among service providers that could lead to potential conflicts of interest as well as information about investment options and risks.
The committee’s chairman, Rep. George Miller, D-California, acknowledges that the bill, which his committee approved on a party-line vote, will not win passage this year, with a spokesman blaming opposition from the Bush administration.
Earlier, Bradford Campbell, assistant secretary for the Labor Department’s Employee Benefits Security Administration, said the legislation would make 401(k) plan fee disclosure more “complex and expensive than it needs to be.”
Employer groups opposed the legislation, saying it would have led to more litigation and higher administrative costs, while overwhelming participants with too much information.
Supporters of the legislation, though, argued that participants now lack the means to accurately compare fees.Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail email@example.com.