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Current law does not require disclosure of such fees, and even when it is available, the committee noted, it is hard for investors to find.
Especially during these troubling economic times, workers need to be able to account for every penny taken from their hard-earned savings, said Rep. George Miller (D-Calif.), chairman of the committee. Workers should be entitled to clear and complete information about their retirement security.
The committee stressed how the burden of saving for retirement has shifted from companies running pensions to individuals, and that they need all the help they can get in picking the right investments.
During a time where American workers have already lost $2 trillion in assets due to last years market downturn, it is vital that employees have full access to clear information regarding their hard-earned retirement savings and financial security, added Rep. Rob Andrews (D-N.J.), chairman of the Health, Employment, Labor and Pensions Subcommittee.
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The bill asks administrators to provide investors with information on all feesadministrative fees, investment management fees, transaction fees and any other feeswhich it calls basic investment information, along with disclosures on risks, returns and investment objectivesbefore signing them up for a plan. In addition, it would require administrators to continue to disclose fees in each quarterly statement.
In line with this, plan administrators would have to offer at least one low-cost index fund and to disclose all financial relationships so that plan sponsors can detect potential conflicts of interest.
The committee approved a similar bill in April 2008.