401(k) Fee Disclosure Bill Introduced in the House of Representatives
On April 21, 2009, Representative George Miller (D-CA) introduced HR 1984, “The 401(k) Fair Disclosure for Retirement Security Act of 2009,” which would require certain disclosures to employees regarding their individual investment account. The bill is aimed at providing more transparency for workers who have chosen to invest in a 401(k) retirement plan.
House Education and Labor Committee Chairman George Miller (D-CA)
As drafted, the legislation would amend the Employee Retirement Income Security Act of 1974 (ERISA) to require plan administrators of an individual account plan to provide participants with basic investment information, including a quarterly statement that details all fees a worker incurs on his or her retirement account.
Additionally, plan administrators would be required to inform all plan sponsors of the fees that are being charged to participants. Plan administrators would also be required to offer at least one low-cost index fund to participants as well as to disclose their financial relationships and those with whom they contract to plan sponsors in order to ensure a conflict of interest does not exist.
The House Education and Labor’s Subcommittee on Health, Employment, Labor, and Pensions held a hearing on H.R. 1984 on April 22, and the full committee is expected to do the same in the near future.
SHRM will monitor developments with this important legislation which, if enacted into law, could have serious implications for HR professionals in the context of administering 401(k) plans for their organizations.