[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Senate]
[Pages S10461-S10462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JOHNSON:
  S. 1541. A bill to amend the Employee Retirement Income Security Act 
of 1974 to require annual informational statements by plans with 
qualified cash or deferred arrangements, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.


                       401 (k) right to know act

 Mr. JOHNSON. Mr. President, I rise today to introduce 
legislation, the 401(k) Right To Know Act, to require that 401(k) plan 
providers implement procedures to disclose the administrative fees that 
they charge their customers. However, I hope the need for the 
legislation can be effectively eliminated by voluntary action on the 
part of the plan providers to disclose fees.

  I am concerned that millions of American families work and save for 
their retirement through 401(k) plans without having an opportunity to 
fully evaluate and compare the costs of such plans. National news 
publications have suggested that some plans may be charging plan 
participants up to 2.5% of assets annually to manage their accounts. 
While I believe families should be free to choose among competing plans 
and to participate in retirement savings vehicles of their choice, I am 
troubled that information about fees is not fully disclosed.
  I believe that we have an obligation to make sure that families have 
access to basic information about fees. Congress encourages people to 
participate in 401(k) retirement plans by providing considerable tax 
advantages. We should give equal care to making sure that

[[Page S10462]]

businesses and families have the information necessary to protect their 
nest eggs from excessive, undisclosed fees that threaten to siphon off 
the rewards of their work and prudence.
  Recently the Department of Labor, the American Bankers Association, 
the American Council of Life Insurance, and the Investment Company 
Institute announced a plan to address these concerns and provide 
information about 401(k) fees. I applaud this responsible and important 
effort. The agreements reached should be given fair consideration and 
an opportunity to be implemented. It is my sincere hope, that these 
efforts will be supported by all 401(k) plan providers and that 
consumers will utilize and benefit from fee disclosure.
  Nonetheless, I want to go on record to articulate my lingering 
concern for the lack of disclosure currently provided and make known my 
conviction to pursue legislative action should the industry fail to 
fully implement the goals of disclosure recently agreed upon. Again, I 
want to reiterate that I believe the recent announcement is an 
important step to resolve this issue. My goal is to make sure consumers 
have accurate and timely information about fees readily available to 
them. I will be monitoring the progress closely and remain hopeful that 
legislative action will not be necessary to achieve disclosure of 
401(k) fees.
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