The Bush administration said Tuesday that it will look into ways to help people get information about fees and expenses assessed on 401(k) plans, which can drain hard-earned money from workers’ retirement savings.
The Labor Department’s Employee Benefits Security Administration will start soliciting ideas Wednesday from the public, industry and other interested parties aimed at improving the disclosure of these charges to millions of people with 401(k) retirement savings plans.
The effort comes as some lawmakers in the Democratic-controlled Congress have suggested the possibility of legislation to make sure people are provided information about these 401(k) fees. Current law doesn’t explicitly require disclosure to investors of comprehensive information on such fees.
With 401(k) plans, employees can make tax-deferred contributions from their salaries to investment accounts. These plans have grown in popularity over the years, while traditional employer-paid pensions that guarantee a monthly benefit have waned.
About 80 percent of investors in 401(k) plans do not know how much fees are eroding their account balances, according to a report by the Government Accountability Office issued in November. The report, among other things, said the Labor Department should require investors get a summary of all fees paid either from plan assets or by participants.
In its proceeding, the department said it will seek information “concerning what administrative and investment-related fee and expense information participants should consider when investing their retirement savings, the manner in which the information should be furnished to participants and who should provide that information.”