401(k) disclosure bill introduced in Senate

Legislation requiring more disclosure of 401(k) fees was introduced today by Sen. Tom Harkin, D-Iowa, and Senate Aging Committee Chairman Herb Kohl, D-Wisc. The Harkin/Kohl Defined Contribution Fee Disclosure Act would require 401(k) plan providers to disclose all fees. “This bill will shed light on the 401(k) selection process and give Americans more control over their retirement future,” Mr. Harkin said in a statement. “Disclosure is especially important in the case of 401(k)s as the slightest difference in fees can translate into a staggering depletion in savings, greatly affecting one’s ability to build a secure retirement,” Mr. Kohl said in the statement. The bill requires that the overall level of fees be disclosed to plan participants when they choose investment options and on their quarterly statement, along with historical returns, risk, and basic investment guidance. The bill also increases the information that plan service providers would have to give to employers who sponsor the plans, including information about relationships between all parties with a financial interest in a plan.