DOL Official Testifies Before Senate Committee on Fee Disclosures
WASHINGTON, DC, September 17, 2008 -- Bradford P. Campbell, assistant secretary of labor for the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), today testified before the Senate Committee on Health, Education, Labor and Pensions on initiatives to expand disclosure of fees and expenses in 401k-type plans to an estimated 65 million workers, employee benefit plan fiduciaries and the government. Campbell's testimony focused on three regulatory initiatives to improve fee disclosure and transparency in a manner that is appropriate and cost-effective for workers and plan fiduciaries.
"Together these rules will ensure that millions of American workers and plan officials get the information they need to make informed decisions about plan services and investments. Our ultimate goal is to ensure that plans and workers pay only fair, competitive and transparent prices for services to their plans," Campbell said.
In his testimony, Campbell discussed key elements of EBSA's regulatory initiatives to improve plan fee disclosure. These include:
A proposed rule that will make it easier for workers covered by 401k-type plans to make informed retirement saving decisions by providing them with useful summary information, including fee and expense information, for investment options available under their plans. The centerpiece of the July 23, 2008, proposal is a model chart that can be used to provide investment-related information to workers in an easy to-read, comparative format. The chart is available at www.dol.gov/ebsa/modelcomparativechart.doc.
A regulation proposed for plan fiduciaries on Dec. 13, 2007, that would require service providers to disclose specific and detailed fee and conflict of interest information when they enter into contracts with plans. The proposal requires service providers to disclose in writing the services they will provide to the plan and all compensation, direct and indirect, they will receive for providing those services. This information will assist plan fiduciaries in deciding whether the compensation to be received by the service provider is reasonable and whether any conflicts of interest exist that may affect the performance of plan services.
Changes to the Form 5500, finalized on Nov. 16, 2007, that expanded the information reported on the Schedule C relating to indirect compensation received by service providers to assist plan fiduciaries in monitoring the reasonableness of compensation paid to providers and any potential conflicts of interest.
The full text of today's testimony is available on the Labor Department's Web site at www.dol.gov/ebsa.
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