updated 8/1/2007 9:04:36 PM ET 2007-08-02T01:04:36

More than 80 percent of people aged 25 and older who participate in 401(k) plans do not know how much they pay in fees and expenses, which can drain thousands of dollars from a worker’s retirement savings, according to a survey released Wednesday.

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Rep. George Miller, chairman of the House Education and Labor Committee, seized on the survey by AARP, the advocacy group for seniors, as further evidence that legislation was needed requiring companies that manage 401(k) plans to provide clearer and more complete information on fees. The California Democrat proposed a bill last week that would mandate such disclosure and require 401(k) plans to include at least one lower-cost, balanced index fund in their investment options.

Plan administrators also would have to disclose all potential conflicts of interest — some of which arise because pension consultants are not required to disclose payments they receive from companies that manage 401(k) plan assets.

In the AARP survey, 83 percent of plan participants aged 25 and older said they are not aware of how much they pay in fees and expenses. Fifty-four percent said they do not feel knowledgeable about the bite that fees can take out of their account balances.

The findings are consistent with earlier research, including a report issued in November by congressional investigators.

The AARP survey “offers more proof that 401(k) participants need access to clear and complete information about the fees they are paying, so they can make well-informed decisions about basic things like which plans and investment options will give them the best deal,” Miller said in a statement Wednesday.

Current law does not explicitly require disclosure to investors of comprehensive information on fees connected with 401(k) plans, the employer-sponsored schemes under which workers make tax-deferred contributions from their salaries.

Around 50 million U.S. workers have invested some $2.5 trillion in 401(k) plans, the premier vehicle for retirement savings in this country. The plans have taken on added importance because traditional employer-paid pensions, with a guaranteed monthly benefit, have dwindled among companies.

Critics say fees take an excessive bite out of workers’ retirement funds in 401(k) plans marketed by the profitable mutual fund industry.

With the majority Democrats controlling the House, Miller’s legislation could be approved by it sometime after Congress’ summer recess this month.

As an alternative to the legislation, the government has been examining administrative ways to help people get information about 401(k) plan fees and expenses, with the Labor Department gathering ideas from the public, financial industry and other interested parties aimed at improving disclosure.

Under current law, the fees must be fully disclosed to those at companies who decide on 401(k) plans, but not to investors themselves.

Investment fees make up the bulk of charges in 401(k) plans. Many plans, however, also charge record-keeping and other administrative or legal costs, as well as fees used to cover the advertising expenses and commissions paid to brokerage firms.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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