“There may have been a loss of confidence in the American economy,” said Rep. Robert Andrews (D-New Jersey), “but that doesn’t translate into a loss of confidence n 401(k)s.” Andrews was speaking April 7 at a press conference on the state of retirement planning sponsored by Barclays Global Investors, which used the occasion to report the results of a survey it had hired the Boston Group to conduct on how the crisis had affected plan participants’ behavior. The study was an attempt to discover what could be done to restore confidence in retirement plans and get workers to save more despite the sad-sack results that they were viewing in their quarterly statements.
Andrews, a member of the House Education and Labor Committee; and chairman of that Democrat-controlled committee’s Subcommittee on Health, Employment, Labor, and Pensions (HELP), did say that there are “four significant changes I support in 401(k)s.”
The first is qualified independent investment advice. “Americans are acting as our own pension boards, and we’re not qualified to do so,” argued Roberts. According to a GAO study in 2007 that looked at the defined benefit world, DB boards using “unconflicted advice givers had 30% better returns” than those using conflicted advice givers, the Congressman reported. The second change, said Roberts, would be unbundled fee disclosure. Americans need “not only good, independent advice, but data to help evaluate the advice,” in order “to find out what you are getting for what you’re paying.” Legislation introduced by the House Education and Labor Committee’s chairman, Rep. George Miller (D-California), on unbundling and disclosing fees for 401(k) plans, introduced last session, is likely to be reintroduced in this session said Andrews, who reported that he supports the bill, and believes it will pass this session, partly because of the compelling testimony of Vanguard founder John Bogle before the full committee in March.