Rep. George Miller, D-Calif., today introduced long-awaited legislation that would broaden fee disclosure requirements for 401(k) plans and require each plan to include at least one lower-cost, balanced index fund in its investment lineup, according to a news release from Mr. Miller.
The legislation the 401(k) Fair Disclosure for Retirement Security Act of 2007 would require service providers to annually disclose all fees charged to plan participants, as well as potential conflicts of interest. The legislation would also give plan participants more detailed information on investment strategies, risks and returns.
The bill will go to the House Education and Labor Committee, which Mr. Miller chairs.
The American Benefits Council endorsed a provision in the bill that would require employers to alert employees that investment options should not be selected on the basis of fee levels alone, but also on the consideration of the risk of the options and historical returns, said Jan Jacobson, ABC retirement policy legal counsel. But Ms. Jacobson said council officials are concerned that the complexity of some of the requirements could increase plans costs and make it less likely participants will use the information.