Senate HELP Committee Hearing Focuses on 401(k) Fee Disclosure

September 2008

At a mid-September hearing two members of the Senate Committee on Health, Education, Labor and Pensions (HELP) reemphasized their commitment to expanding 401(k) fee disclosure and the use of software programs that would aid individuals in making investment decisions.

Sen. Tom Harkin (D-IA) in an opening statement cited a recent AARP survey that showed that few individuals understand the fees that are charged to their 401(k) accounts. Sen. Harkin said his fee disclosure bill, the Defined Contribution Fee Disclosure Act (S. 2473), would help investors better understand these fees.

Ranking committee member Sen. Mike Ezzi (R-WY) said fee transparency was one part of the process of improving investors' understanding, but that developing more software for investors to use would be a second important element.

The committee heard testimony from Brad Campbell, Assistant Secretary of Labor. He updated developments regarding the Department of Labor's three-pronged regulatory initiative on fee disclosure and said he expected regulations regarding disclosures by plan providers would be finalized in the next several months. He said a regulation requiring certain disclosures to plan participants was likely to be finalized by the end of the year.