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House Education and Labor Committee approves 401(k) fee disclosure bill

WASHINGTON, D.C. – American workers would receive clear and complete information about fees that could be cutting deeply into their 401(k)-style retirement savings under legislation approved today by the House Education and Labor Committee.

By a vote of 29 to 17, the committee approved the 401(k) Fair Disclosure and Pension Security Act (H.R. 2989), which would help workers shop around for the best retirement investment options by providing information on how much in fees is taken from their retirement accounts. Current law does not require disclosure of certain fees, and even for fee information that is available, it can be difficult for workers to find and evaluate.

"It is beyond time that American workers have basic and clear information on costs and choices contained in their 401(k) plan," said U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee. "The economic collapse has fueled Americans' concerns about whether they will have enough savings to last them throughout retirement. This bill will give Americans a fighting chance to strengthen their retirement and increase our nation's future economic security."

Miller said the issue is particularly important given that increasing numbers of American workers are relying on 401(k)s to help them pay for a decent retirement. Roughly 50 million Americans now have a 401(k)-style plan. Past surveys have shown that more than 80 percent of workers don't know how much they are paying in fees on their retirement savings accounts.

According to the Government Accountability Office, even a seemingly small difference in the fees that workers pay can make an enormous difference in the overall size of their 401(k) account balance. A 1 percentage point difference in fees can reduce retirement benefits by nearly 20 percent.

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