Retirement Bills Advance

The American Benefits Council, Washington, put out a statement welcoming the subcommittee’s interest in increasing plan transparency.

“However, additional modifications will still be necessary to ensure that voluntary employer sponsorship of these arrangements are not disturbed,” James Klein, the council’s president, says in a statement.

But the amended version of the bill does appear to protect the kinds of “non-conflicted” advice arrangements that were permitted before the passage of the Pension Protection Act of 2006, Klein says.

The new version of H.R. 1984 is an improvement over earlier legislation, but it still exposes employers to unacceptable levels of fiduciary liability, Klein says.

“Plan sponsors and other fiduciaries cannot be expected to investigate and audit fee disclosure information provided by service providers unless the information is clearly questionable on its face,” Klein says. “It would be completely impractical for a plan sponsor to audit a mutual fund to determine if its reported expense ratio is accurate. Inevitably, however, some of the information provided will be incorrect due to inadvertent errors. If the plan sponsor or the participants act on the erroneous information, this should not expose the plan sponsor to liability.”