Congressman Andrews is not sitting still (see my previous post). According to a press release from the Committee on Education and Labor, on April 21, 2009, Congressman Andrews, along with Congressman Miller, introduced The 401(k) Fair Disclosure for Retirement Security Act of 2009 (H.R. 1984) (the “Act”). The Act would:
- Ensure that workers receive basic investment information, including information on risk, return, complete fees, and investment objectives before signing-up for a plan;
- Require that all fees – in one number – that are charged against a workers account to be included in the account holder’s quarterly statement;
- Require service firms to tell employers the fees workers’ are charged on all investment options into four categories: administrative fees, investment management fees, transaction fees, and other fees;
- Require plan administrators to offer at least one low-cost index fund to plan participants in order to receive protection against liability for participants’ investment losses;
- Require service providers to disclose financial relationships so companies that sponsor 401(k) plans can make sure there are no conflicts of interest; and
- Give the U.S. Department of Labor the authority to enforce new disclosure rules and fine service providers who violate them.
The text of the Act is here. Additional information on the Act is here. Note that, on July 23, 2008, the Department of Labor published its own proposed rules on fee disclosures. The proposed rules are here.