401(k) Fee Disclosure Bill Introduced in House

calculating fees lead to higher costs?

They have no trouble when they agree calculating the fees so they can collect them.

All they need then is to print them out on the statements...

No big deal to print them out.... get some good IS folks to show them...

Everything they want is justified, what the client wants is too expensive....

Steven Ribich of AZ @ Apr 30, 2009 15:57:14 PM

401(k) Fee Disclosure Bill Introduced in House

This bill is a good start, but it won’t solve the problem of high costs and conflicts of interest.

Here is what I’m talking about: Congress needs to simplify 401(k) and 403(b) plans. For instance, it makes sense for employers to use a prototype plan document and Investment Policy Statement (IPS) designed by the DoL. That way we can cut out all of the middlemen such as ERISA attorneys, investment advisers, plan consultants, and record keepers. Just think about it: Do we really need the extra cost of having a record keeper? No! For instance, do you need one for your IRA? No! See?

My point is this: Can we finally agree that 401(k) and 403(b) plans are way to complicated for employers and employees to get the most benefit from? I hope we can agree because nothing will change regarding costs and conflicts of interest if we don't.

You (employers and participants in a plan) need to tell Congress to simplify 401(k) and 403(b) plans so that we finally get the middlemen out of our pockets.

Frank R. Cirullo of CA @ Apr 25, 2009 12:40:53 PM

reaction

It is easy to see all the fund fees, but not as easy to find out the admin fees. Both are outrageous and it infuriates me. the basic story goes like this. Broker with 401k company calls the CFO of a small company and talks about adding 401k plan. CFO is already overwhelmed but the CEO put them in charge of 401k plan anyway. They have no idea about funds or fees and the broker knows this. The broker provides a plan loaded with fund fees, back loads and other fees. The employees pay the price over the long term and the broker makes a mint. It is a disgrace.

The government needs to step in and fix this situation. Wall Street is winning big time with 401ks, while main street loses again.

fiore of PA @ Apr 24, 2009 12:19:02 PM

401(k) Fee Disclosure

How much do you think disclosure of fees would matter to the average employee who pays $5 for a latte every morning, $30 for getting her nails done every week and only contributes $50 per month into the plan. Your requireents could increase plan investment fee tracking costs so much that it would cause employers like myself to just give up the whole idea of trying to provide this benefit to our employees. We choose our plan provider based upon the investments offered and intangibles such as the personal investment planning and education services he/she provides to us and to our employees. How would we represent that cost to the employee who doesn't even show up for his/her quarterly meetings with the staff but is the first to complain when his/her $600 annual investment into the plan experiences a loss.

Another thing, when I look at my son's thrift savings plan with the federal government, I have to wonder if you will also require our government agencies to produce the same investment fee information. What is law for us private industry plan sponsors must also be required law for our government plans.

C. Rudd of NC @ Apr 23, 2009 16:33:50 PM

401(k) Fee Disclosure

What do you expect the employees to do with this information? Most of them can name the finalists for American Idol, but don't know the difference between a stock fund and the guaranteed account.

It's not due to lack of trying on the plan sponsor's part. Most of the employees simply DON"T CARE.

Steven Glenn of FL @ Apr 23, 2009 13:43:09 PM

401(k) Fee Disclosure

What do you expect the employees to do with this information? Most of them can name the finalists for American Idol, but don't know the difference between a stock fund and the guaranteed account.

It's not due to lack of trying on the plan sponsor's part. Most of the employees simply DON"T CARE.

Steven Glenn of FL @ Apr 23, 2009 13:43:07 PM