There’s an “excellent chance” that the Department of Labor (DOL) will finalize its three initiatives dealing with 401(k) fee disclosures before Congress can pass a bill on the issue, says Stephen Saxon, a principal at Groom Law Group in Washington. Saxon says the 401(k) Fair Disclosure for Retirement Security Act of 2007, the bill sponsored by Rep. George Miller (D-California), has little chance of being enacted this year.
The three initiatives DOL is working on now regarding fees “deal with the disclosure of service provider compensation at the plan sponsor and participant level,” says Saxon. Meanwhile, at least a dozen cases involving 401(k) fees are being battled in the courts, all while Congress is holding hearings on the matter. It’s rare “to have Congress, DOL as the federal agency with jurisdiction, and the courts all focusing on the same issue at the same time,” Saxon says, adding that “you can’t just focus on what DOL is doing, you have to understand all three.” The plaintiffs’ bar, like DOL and the Miller bill, “is taking the position that participants have a legal right to all sorts of information [about expenses] that they don’t get,” Saxon says.