NEWS RELEASE

April 22, 2009
PR-09/14

For additional information:
Jason Hammersla
202-289-6700
jhammersla@abcstaff.org

Council Urges House Subcommittee to Prepare 401(k) Fee Bill that Benefits Both Plan Participants and Plan Sponsors

WASHINGTON, D.C. — "The American Benefits Council recognizes that our common goal is an effective 401(k) system that functions in a transparent manner and provides meaningful benefits at a fair price in terms of fees. We want to be as helpful to that process as possible as you consider this legislation," said Robert G. Chambers, past chair of the American Benefits Council Board of Directors, during his testimony today before the Health, Employment, Labor, and Pensions Subcommittee of the House Education and Labor Committee. Chambers, a partner with the law firm McGuireWoods LLP, spoke during today's hearing regarding the 401(k) Fair Disclosure for Retirement Security Act of 2009, legislation introduced by Committee Chairman George Miller (D-CA).

"The Council supports improvement to the rules regarding plan fee disclosure," Chambers added. "Effective plan fee disclosure to participants can enable them to understand their options and to choose those investments that are best suited to their personal circumstances."

However, Chambers cautioned the legislators that "over the past few years, we have seen significant growth in litigation involving defined contribution plans, much of which is directly related to plan fees. So, as this Subcommittee and the full Committee consider fee legislation, we urge you to also consider the nature of the fee-related litigation that has been filed and pay special attention to areas that could inadvertently increase litigation."

Chambers then turned his comments to the subject of disclosure by plan fiduciaries to plan participants. "It is critical to emphasize that disclosure rules should take into account the sharply different circumstances of participants and plan fiduciaries. Participants value clear, simple, short disclosures that effectively communicate the key points that they need to know to decide whether to participate and, if so, how to invest. Plan fiduciaries need more detailed information since it is their duty to understand fully the options available and to make prudent choices on behalf of all of plan participants."

Concluded Chambers, "401(k) plans have become a primary retirement plan for millions of Americans. Accordingly, it is more important than ever for all of us to take appropriate steps to ensure that 401(k) plans provide those Americans with retirement security."

Chambers' full testimony is available on the Council's web site. For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

http://www.americanbenefitscouncil.org/issues/retirement/dcplan.cfm