Compliance October 25, 2007

Kohl to Unveil Senate Version of 401(k) Fee Disclosure Legislation

Referring to fees charged to 401(k) plan participants, at a hearing Wednesday, the Chairman of the Senate Special Committee on Aging said that consumers have a basic right “to clearly know how much products and services are costing them.″
Reported by

The hearing, called this week by Chairman Senator Herb Kohl, (D-Wisconsin), came days before another fee disclosure hearing scheduled by the U.S. House Ways and Means Committee (See Ways and Means Committee to Hear Testimony on DC Plan Fees).

According to the Business Times, Kohl and Senator Tom Harkin, (D-Iowa), are expected to introduce the Defined Contribution Fee Disclosure Act of 2007 this week, which would require full transparency of 401(k) fees to both employers and participants.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The Senate bill follows a similar proposal introduced in July by U.S. Representative George Miller, (D-California) that also calls for full disclosure of fees to plan participants (See Fee Disclosure Legislation Introduced in House).

Miller’s proposal triggered a great deal of criticism at a recent U.S. House Education and Labor Committee hearing, where panelists argued that such detailed disclosure requirements would impart too heavy a burden on plan sponsors and plan providers and plan participants would be no better off to make investment decisions (See Fee Disclosure Proposal Draws Industry Criticism at House Committee Hearing).

Products October 25, 2007

John Hancock Unveils DB Product

John Hancock Retirement Plan Services (JHRPS) has launched a defined benefit program.
Reported by

The product, which will be offered through intermediaries, is being aimed at:

  • professionals seeking to contribute more than $45,000 to their retirement plan,
  • owners who are approaching retirement and are seeking ways to maximize contributions,
  • professionals group (doctors, CPAs, lawyers),
  • family and closely-held businesses.

“We can now provide our clients with defined benefit plans, 401(k) plans or both – depending on the unique needs of that company,” said Ed Eng, Senior Vice President, Product Development, in the news release. “With the passage of the Pension Protection Act of 2006, we see an opportunity to grow this freshly invigorated market.”

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The company said early experience suggests increasing interest in cash balance plans from a range of professional dominated organizations and small businesses.

The defined benefit plans will be offered through an unbundled model. Plan design, testing, and actuarial support will be provided by pension consultants or third party administrators (TPAs), the company said.

For more on small defined benefit programs, see What’s Old Is New Again.

«