In testimony last week before the House Education and Labor Committee, the Department of Labor said that it supports improved disclosure of 401(k) fees and expenses but contended that federal law already provides the department with the necessary regulatory authority and cautioned that any legislation not disrupt the department's efforts.
The testimony of Bradford P. Campbell, assistant secretary of labor for employee benefits security, focused on the department's current regulatory initiatives expanding disclosure requirements to provide participants, plan fiduciaries, and the public with better information about plan fees and expenses. His testimony described the department's progress to date.
"Workers need useful, concise information allowing them to compare investment options in their plans, while plan fiduciaries need more comprehensive disclosures to enable them to fulfill their legal obligations to workers," said Campbell . "Our three regulatory initiatives will target the specific needs of workers, plan fiduciaries, and the public, striking the right balance of disclosure, utility, and cost-effectiveness."
In his testimony, Campbell discussed the three 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. He also expressed concern that the disclosures to workers in pending legislation would not provide concise, useful fee information, and that the government should not select and mandate specific investment products in 401(k) plans, preventing workers and employers from designing benefits that best serve their mutual needs.
"Ensuring participants and fiduciaries have the information they need to make informed decisions is a top priority for the Labor Department. We will continue to implement regulations fostering fair, competitive and transparent prices for services and combating excessive or hidden plan fees," Campbell concluded.