401(k) Fair Disclosure for Retirement Security Act (H.R. 3185)
Workers have a right to know how much they are paying in fees on their 401(k) plans so that they can make the best investment decisions for themselves. The 401(k) Fair Disclosure for Retirement Security Act (H.R. 3185), which was passed by the Committee by 25-19 on April 16, would provide workers with clear and complete information about the fees they are paying. Myths vs. Facts » (PDF, 47KB)
About the 401(k) Fair Disclosure for Retirement Security Act
H.R. 3185 would:
Require Complete Disclosure of Fees Charged on 401(k) Plans
- Require plan administrators to disclose all fees assessed against the participant?s account, broken down into four categories: administrative fees, investment management fees, transaction fees, and other fees.
Help Workers Understand Their Investment Options
- Require plan administrators to clearly identify the name, risk level, and investment objective of each available investment option;
- Require plan administrators to identify historical returns for and fees assessed on each investment option; and
- Require plan administrators to specify where plan participants can obtain additional plan and investment information.
Ensure workers have access to at least one low-cost index fund
- Require plan administrators to offer at least one low-cost index fund to plan participants in order to receive protection against liability for participants? investment losses.
Disclose Fees and Conflicts of Interest to Sponsors of 401(k) Plans
- Require service providers to disclose to the plan sponsor the four categories of fees charged to the plan or its participants; and
- Require service providers to outline any financial relationships or potential conflicts of interest to plan sponsors.
Enhance Department of Labor Oversight and Protection
- Require the Labor Department to review compliance with new disclosure requirements and impose penalties for violations.
Support for H.R. 3185
- AFL-CIO » (PDF, 263KB)
- AARP » (PDF, 912KB)
- American Society of Pension Professionals and Actuaries and the Council of Independent Recordkeepers » (PDF, 30KB)
- Pension Rights Center » (PDF, 38KB)
Reports on 401(k) Fees
401(k) Participants' Awareness and Understanding of Fees »AARP, July 2007
Building 401(k) Wealth One Percent at a Time: Fees Chip Away at People's Retirement Nest Eggs »
Center for American Progress, March 2007
Testimony from March 2007 Full Committee Hearing
Barbara Bovbjerg »
Director for Education, Workforce and Income Security Issues
U.S. Government Accountability Office
Washington, D.C.
Matthew Hutcheson »
Independent Pension Fiduciary
Tigard, Oregon
Stephen Butler »
President and Founder
Pension Dynamics Corporation
Contra Costa County, CA