The U.S. House of Representatives approved legislation today that includes a provision to expose hidden 401(k) fees that may be eating into Americans’ retirement savings. The provision was part of the American Jobs and Closing Tax Loopholes Act (H.R. 4213).
A majority of American workers rely on 401(k)-style plans to finance their retirements, but most do not know how much Wall Street middle men are taking from their retirement accounts. Just a 1-percentage-point in excessive fees can reduce a worker’s 401(k) account balance by as much as 20 percent or more over a career. Workers should have the right to know how much Wall Street intermediaries siphon off from their savings. Provisions included in H.R. 4213 regarding fee disclosure were based on the 401(k) Fair Disclosure and Pension Security Act, which was authored by Chairman Miller and approved by the Education and Labor Committee last year. Specifically, these provisions: