House Approves Landmark Effort to Expose Hidden 401(k) Fees
WASHINGTON, D.C. – The U.S. House of Representatives approved legislation today that includes a provision to expose hidden 401(k) fees that may be eating into Americans’ retirement savings. The provision was part of the American Jobs and Closing Tax Loopholes Act (H.R. 4213).
“It is beyond time that Americans have basic, clear and timely information on the costs and choices contained in their 401(k) plans,” said U.S. Rep. George Miller (D-CA), the chair of the House Education and Labor Committee. “Guaranteeing complete and simple disclosure of fees will help give Americans a fighting chance to strengthen their retirement and increase our nation’s future economic security.” Provisions included in H.R. 4213 regarding fee disclosure are based on the 401(k) Fair Disclosure and Pension Security Act, which was authored by Miller and approved by the Education and Labor Committee last year.
Federal law does not require the disclosure of fees taken out of workers’ 401(k)-style accounts. With more than 50 million Americans relying on these plans to finance their retirements, hidden fees can make a big difference in families’ retirement security. The Government Accountability Office found that a one-percentage point difference in fees could cut retirement assets by nearly 20 percent.
H.R. 4213 also includes provisions that would make modest adjustments to funding requirements of traditional pension plans so plan sponsors will not have to choose between freezing plans or cutting jobs.
“This bill will save jobs by providing pension plans the flexibility they need to continue their plans without freezing or defaulting,” said Miller. “All liabilities must still be paid, but plans will have more time to make up for the historic financial collapse.”
More information on the 401(k) and pension provisions in H.R. 4213