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October 24, 2007 at 09:21 PM
Sen. Herbert Kohl says he intends to introduce a 401(k) plan fee disclosure bill.
Kohl, D-Wis., talked about the bill, the Defined Contribution Fee Disclosure Act, here today at a hearing of the Senate Special Committee on Aging on plan fees.
Kohl will be introducing his disclosure bill with Sen. Tom Harkin, D-Iowa.
“Our bill will help shed some light on these fees by requiring complete transparency to both employers and participants,” Kohl said. “This will allow employers to be able to negotiate with pension fund managers in order to get the lowest possible fees for their employees.”
Sen. Gordon Smith, R-Ore., spoke of the dangers of overwhelming plan participants with too many details and of increasing plan sponsors’ costs.
Bradford Campbell, head of the Employee Benefits Security Administration, noted that different audiences have different disclosure needs.
Plan participants may need simple disclosures of fees, plan sponsors may need details they can use to compare different plans, and regulators may need help with deciding whether fees are reasonable and within the bounds of the law, Campbell said.
EBSA and the IRS will weigh in on the disclosure in a few weeks, when the final Form 5500 benefit plan tax form regulations are released.
