Lawmakers plan push to reform 401(k) plans

Bill is expected to incorporate fee disclosures and “conflicted” investment advice into a comprehensive bill

Jun 22, 2009 @ 3:40 pm

By Mark Bruno

A pair of key lawmakers are expected to introduce a bill on retirement reform later this week that could have substantial implications for investment advisers, 401(k) service providers and the majority of employer-sponsored retirement plans.

Rep. George Miller, D-Calif., and Rep. Rob Andrews, D-N.J., are preparing to introduce the 401(k) Fair Disclosure and Pension Security Act Wednesday at a Committee on Education and Labor meeting, confirmed Aaron Albright, press secretary of the committee.

This act is expected to incorporate several pieces of existing legislation into one comprehensive bill, Mr. Albright said.

Specifically, this would include a bill authored by Mr. Miller that would require increased disclosure of fees and expenses in 401(k) plans, and possibly a bill introduced by Mr. Andrews earlier this year that would prevent so-called “conflicted” investment advisers from working directly with 401(k) plan participants.

Both of those bills — the 401(k) Fair Disclosure for Retirement Security Act and the Conflicted Investment Advice Prohibition Act — were approved separately last week by the Health, Employment, Labor and Pensions Subcommittee, which is chaired by Mr. Andrews. They are now scheduled for a vote Wednesday morning, by the full Committee on Education and Labor, which is chaired by Rep. Miller.

In the new bill, those two pieces of existing legislation may also be combined with legislation that would provide corporate plan sponsors with some temporary relief from making required contributions to their defined benefit pension plans.

A final version of the new bill was not available at press time.

Representatives for Mr. Miller and Mr. Andrews were not immediately available for further details.


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