While the U.S. Department of Labor (DOL) and several industry organizations support improved disclosure of 401(k) fees and expenses, they are not convinced that the 401(k) Fair Disclosure for Retirement Security Act of 2007 (HR 3185) is the right vehicle to accomplish that.
DOL has initiated regulatory projects to improve fee disclosure to plan participants, to enhance reporting of fees and expenses to the public, and to increase disclosure to plan fiduciaries by service providers, said DOL's Bradford P. Campbell in recent testimony before the U.S. House of Representatives' Education and Labor Committee.
Campbell, assistant secretary of labor for employee benefits security, explained that the Department is making significant progress with those initiatives. He expressed concern that pending legislation would not provide concise, useful fee information to workers and said the government should not select and mandate specific investment products in 401(k) plans.
Lew Minsky, senior attorney for the Florida Power and Light Company, was more direct. "HR 31 DOL a chance to complete its work on fee disclosure before proceeding with new legislation.
"We strongly believe that the additional flexibility inherent in the regulatory system makes the DOL initiatives the appropriate vehicle for new disclosure requirements. Any new legislative requirements would likely only delay those efforts, resulting in delayed reforms," he said in his testimony on behalf of The ERISA Industry Committee, the Society for Human Resource Management, National Association of Manufacturers, U.S. Chamber of Commerce, and the Profit Sharing/401k Council of America.
If the Education and Labor Committee proceeds with the current proposal, Minsky said the bill needs "a comprehensive rewrite that ensures a more streamlined regime."