The Securities Industry and Financial Markets Association (SIFMA) president and CEO Marc Lackritz today commented on H.R. 3185, the 401(k) Fair Disclosure for Retirement Security Act of 2007, a bill regarding supplemental disclosure provisions and reporting requirements associated with 401(k) plans.
The bill was introduced by Rep. George Miller (D-CA), chairman of the House Education and Labor Committee.
The bill would require plan administrators to disclose all fees charged to plan participants each year; more detailed information on investment strategies, risks and returns when participants sign up for 401(k)s; as well as information on conflicts of interest and fees to employers who sponsor the plans.
In addition, 401(k)s would have to include at least one lower-cost balanced index fund, and the Department of Labor would be given greater oversight over the plans.
“SIFMA continues to support clear and meaningful disclosure that helps the millions of participants and their plan sponsors better understand the benefits and costs of investing in 401(k) plans,” says Lackritz. “Ensuring an effective and transparent 401(k) system that provides benefits at a fair price to employees is in the nation’s interest.”
Lackritz adds:”Policymakers must be mindful that information should empower participants — not paralyze them. Participants are already overwhelmed by the amount of information they receive. Disclosure is not the same as education. Any additional disclosure requirements should meet a high standard: information should deliver far more value to the participant than the cost it would add to the plan to provide it.”