WASHINGTON–A House panel Wednesday approved legislation that would mandate greater disclosure of fees charged by service providers and plan administrators of 401(k)s.

It is unclear when the House will consider the legislation, a pet project of Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee.

No companion bill is under consideration in the Senate.

Officials of the American Benefits Council lauded inclusion of provisions in the bill that would give employers greater flexibility in funding their defined benefit plans during a period of great economic stress. But ABC officials voiced concern with the 401(k) fee disclosure and investment advice provisions of the legislation, as have many insurance underwriters and agents since the committee began considering the bill in 2007.

The bill, which the committee approved by a 29-16 vote, is H.R. 2989, the 401(k) Fair Disclosure and Pension Security Act.

It would require 401(k) service providers and plan administrators to disclose fees charged on 401(k) plans, broken down into 4 categories: administrative fees, investment management fees, transaction fees and other fees.

It also would require 401(k) plans to disclose fees taken from participants’ accounts in dollar figures in quarterly statements. In addition, it would mandate that if workers get investment advice through their jobs, the advice must be based on the workers’ needs–and not the financial interests of those providing the advice.

It also would call for plan administrators to offer at least one low-cost index fund to plan participants to receive protection against liability for participants’ investment losses, and it would make service providers disclose financial relationships that potentially might create a conflict of interest.

The defined benefit pension funding relief provisions in the legislation “will help alleviate some of this funding pressure by permitting companies using the spot yield curve for 2009 to be able to elect to use the segment rates for 2010,” according to James Klein, president of ABC.

It also would revise the effective date of the Internal Revenue Service funding regulations to apply to plan years beginning after Dec. 31, 2009.

Klein says an amendment to the bill offered by Rep. Brett Guthrie, R-Ken., adds the “two plus seven” provision, which would require employers for 2 years to pay interest on their plans’ 2008 losses to prevent the plans’ shortfall from growing. But under the amendment, 7-year amortization of those losses would not commence until the expiration of those 2 years.

“This relief will help restore companies’ economic footing,” Klein said. “We look forward to the committee returning to this issue as soon as possible to more fully address substantive relief to specifically address the 2008 losses.”

While supporting the provisions dealing with defined benefit plan funding, Klein voiced concern about the 401 (k) provisions consistent with concerns voiced by other industry groups.

These groups sent a joint letter raising questions about the practical impact of the tough disclosure and conflict-of-interest provisions of the legislation.

The trade groups include the American Bankers Association; the Financial Services Roundtable; the Investment Company Institute; the National Association of Manufacturers; the Profit Sharing/401k Council of America; the Securities Industry and Financial Markets Association; the Society for Human Resource Management; and the U.S. Chamber of Commerce.

“We continue to have some concerns about the underlying 401(k) fee disclosure bill, which continues to expose employers to unacceptable levels of fiduciary liability,” Klein said. “We are hopeful that these outstanding issues can be addressed before the bill goes to the House floor.”

Klein also said he had concerns that the investment advice portion of the legislation would not protect the many non-conflicted advice arrangements approved by the U.S. Department of Labor before enactment of the Pension Protection Act of 2006 (PPA).

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The ABC had urged lawmakers to validate these pre-PPA arrangements in recent comments on H.R. 1988, provisions of which were added to H.R. 2989. The ABC had included in its comments proposed modifications to the bill, but these apparently were not supported in the bill as passed by the committee.