Requiring all 401(k) plan companies to provide detailed cost reports would be a big help both to independent plan service providers and to plan sponsors.
Thomas Thomasson, president of DailyAccess Corp., Mobile, Ala., made that argument on behalf of the American Society of Pension Professionals & Actuaries, Arlington, Va., and ASPPA’s sister organization, the Council of Independent 401(k) Recordkeepers, Thursday at a hearing on plan disclosures organized by the House Education and Labor Committee.
The chairman of the committee, Rep. George Miller, D-Calif., convened the meeting to promote H.R. 3185, the “401(k) Fair Disclosure for Retirement Security Act of 2007.”
H.R. 3185, introduced by Miller, calls for insurers, mutual fund companies and other providers of “bundled” plan services to provide the same kind of detailed breakdowns of fees for plan services that independent providers of “unbundled services” typically provide.
The U.S. Department of Labor has come out with a tax form revision proposal that would require providers of unbundled plan services to give cost breakdowns but apparently would exempt providers of bundled services from the disclosure requirements, Thomasson said.
Plan fiduciaries have a legal obligation to make sure that plan recordkeeping fees and administration fees are reasonable, Thomasson said.