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From the Orlando Sentinel, Wednesday, May 7:
Some 50 million American workers are enrolled in 401(k)-style retirement-savings plans, but fees charged in those plans can cut deeply into their returns. And most Americans with 401(k) plans -- more than 80 percent in a 2007 AARP survey -- are in the dark about how much of their savings they are losing to fees.
Congress needs to shine the light. A move in the House to require 401(k) providers to disclose their fees deserves support from lawmakers in both parties.
Disclosing and breaking down fees that are now hard to decipher or hidden would help employers make more thorough comparisons when selecting 401(k) providers for their workers. It would arm workers with more information to choose the best investment options available to them, or to pressure their employers to switch to providers offering lower fees.
Providers and their pals in Congress have argued that detailed disclosure on fees would confuse 401(k) participants and raise costs. Those potential problems could be avoided by keeping the disclosure requirements clear and simple. The additional information would spur more competition among providers on fees. That would push costs down, not up.
Federal regulators have been working on their own 401(k) fee-disclosure requirements, and growing awareness of the issue has led some providers to improve disclosure voluntarily. Congress shouldn't count on either going far enough. Lawmakers need to make sure Americans with 401(k) plans have the knowledge to hold on to more of their hard-earned savings. |
