401(k) Fee Disclosure Bill Introduced in House

This bill is a good start, but it won’t solve the problem of high costs and conflicts of interest.

Here is what I’m talking about: Congress needs to simplify 401(k) and 403(b) plans. For instance, it makes sense for employers to use a prototype plan document and Investment Policy Statement (IPS) designed by the DoL. That way we can cut out all of the middlemen such as ERISA attorneys, investment advisers, plan consultants, and record keepers. Just think about it: Do we really need the extra cost of having a record keeper? No! For instance, do you need one for your IRA? No! See?

My point is this: Can we finally agree that 401(k) and 403(b) plans are way to complicated for employers and employees to get the most benefit from? I hope we can agree because nothing will change regarding costs and conflicts of interest if we don't.

You (employers and participants in a plan) need to tell Congress to simplify 401(k) and 403(b) plans so that we finally get the middlemen out of our pockets.

Frank R. Cirullo of CA 12:40PM April 25, 2009

How much do you think disclosure of fees would matter to the average employee who pays $5 for a latte every morning, $30 for getting her nails done every week and only contributes $50 per month into the plan. Your requireents could increase plan investment fee tracking costs so much that it would cause employers like myself to just give up the whole idea of trying to provide this benefit to our employees. We choose our plan provider based upon the investments offered and intangibles such as the personal investment planning and education services he/she provides to us and to our employees. How would we represent that cost to the employee who doesn't even show up for his/her quarterly meetings with the staff but is the first to complain when his/her $600 annual investment into the plan experiences a loss.

Another thing, when I look at my son's thrift savings plan with the federal government, I have to wonder if you will also require our government agencies to produce the same investment fee information. What is law for us private industry plan sponsors must also be required law for our government plans.

C. Rudd of NC 4:33PM April 23, 2009

What do you expect the employees to do with this information? Most of them can name the finalists for American Idol, but don't know the difference between a stock fund and the guaranteed account.

It's not due to lack of trying on the plan sponsor's part. Most of the employees simply DON"T CARE.

Steven Glenn of FL 1:43PM April 23, 2009