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CCH® PENSION AND BENEFITS — 4/14/08

Legislative action seen on PPA technical corrections, 401(k) plan fees

Congressional action on legislation to make technical corrections to the Pension Protection Act of 2006 (P.L. 109-280; PPA) is likely to happen soon, according to Brian Graff, executive director of the American Society of Pension Professionals and Actuaries (ASPPA). Graff also predicted that the House would pass a 401(k) fee disclosure bill in this session. Graff spoke at the 2008 Great Lakes Benefits Conference, co-sponsored by the IRS and ASPPA, held in Chicago on April 3, 2008.

PPA technical corrections

Both the House and Senate have passed versions of PPA technical corrections legislation, although there are some differences between the two bills. Graff thinks that the two sides are “close” and predicted passage of a bill prior to the Memorial Day congressional recess. He also told CCH that he expects the legislation to be a stand-alone bill and not attached to extenders or other tax legislation.

401(k) fee disclosures

Congress has also turned its attention to 401(k) plan fees, Graff noted. While the Department of Labor is pursuing a variety of initiatives focused on fee and expense transparency, there is action on the legislative front as well.

The DOL has issued proposed 401(k) plan fee disclosure rules (CCH Pension Plan Guide ¶20,537F ) and has modified Schedule C of Form 5500 which, effective for the 2009 plan year, requires expanded disclosure of service provider compensation. In addition, the Department is developing a proposed regulatory change to the ERISA §404(c) rules that is designed to clarify what fee information must be provided to participants to enable them to compare fees among a plan’s investment options.

On the congressional side, 401(k) fee disclosure legislation sponsored by Rep. George Miller (D-CA) is scheduled for markup by the House Labor and Education Committee on April 16, 2008. The House Ways and Means Committee is expected to follow with its own markup of a bill, said Graff. The House will “probably” pass fee disclosure legislation, he said, but added that he does not expect the Senate to take up the bill this year. Rep. Miller, however, is likely to pursue this issue in the next Congress, Graff said.