Congress and 401(k) Fees

The next (current?) round of ERISA class action lawsuits will allege that plan fiduciaries do not properly pick mutual funds with reasonable fees for employees' 401(k) plans, leading to less investment return for participants (the previous round concerned so-called ERISA stock drop litigation). 

According to Jerry Kalish at The Retirement Plan Blog, the new Congress is likely to take steps to insure that employees receive more information about mutual fund fees:

Yesterday’s article in the San Francisco Chronicle, Dems set to take on pension, health industries, reported that Rep. George Miller, D-Cal., said the House Education and the Workforce Committee that he is in line to chair under the new Democratic-controlled Congress should hold hearings next year to examine the fee issue.

Congressman Miller has said more specifically in this regard:

It's critical that workers' hard-earned savings not be wasted on excessive fees. Workers need complete, accurate and clear information about the total cost of different investment options so they can choose the ones that are best for them.

To learn more about the 401(k) mutual fund fee situation, check out the Government Accounting Office report, Changes Needed To Provide 401(k) Plan Participants and the Department of Labor Better Information on Fees, in which the GOA lays out disclosure and conflict of interests proposals to protect employees from excessive fees.

PS