Members of a House subcommittee have sent two retirement plan bills to the full House Education and Labor Committee.

The Health, Employment, Labor, and Pensions Subcommittee, an arm of the House Education and Labor Committee, approved substitute versions of H.R. 1984, the 401(k) Fair Disclosure for Retirement Security Act of 2009, and H.R. 1988, the Conflicted Investment Advice Prohibition Act of 2009, by a 13-8 vote.

H.R. 1984, the CIAPA bill, would impose tighter restrictions on financial services companies that sell investment products to defined contribution retirement plans and also want to offer plan participants investment advice.

The bill would reverse regulations adopted by the Bush administration in January.

H.R. 1988, the 401(k) Fair Disclosure act, would require plan service providers to give sponsors and participants more information about plan fees.

“The lack of transparency in the 401(k) system is unacceptable and must end now,” Rep. Robert Andrews, D-N.J., the chairman of the subcommittee, says in a statement.

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.”