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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 Adrien Martin
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.
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).