(Washington, DC)  Today, Congressman John Yarmuth (KY-3) and the Committee on Education and Labor held a hearing today to determine whether hidden 401(k) fees undermine workers retirement security.

With nearly 50 million employees currently enrolled in the approximately 700,000 401(k) plans, the impact of the complex and allegedly excessive fee structure holds a tremendous impact on the American economy.  The hearing follows the discovery that some 401(k) service plans charge fees as much as 100 times higher than 401(k) programs for larger companies, which have the resources and expertise to monitor the fees.  Though the excess charge may be only 3 percent, when compound interest is factored in over the lifetime of the 401(k), the deficiency in payout can total 20 percent, often over $100,000.

The Department of Labor, which oversees 401(k) programs, currently has no system in place to monitor fees.  They are only made aware of excessive fees if a complaint is filed by a worker or retiree, and even in those rare instances, they are unable to assess the legitimacy of the charge without hiring an external "fee expert."

This leaves the burden on the individual, who must request information and sift through scores of documents to decipher the fee structure.  As a result, the Government Accountability Office reports, more than 80 percent of 401(k) participants do not know how much they pay in fees.

"We cannot allow corporations to profit by deceiving hard-working Americans and swindled out of their nest eggs.  As the responsibility of choosing retirement plans shift to the individual, we have the obligation to guarantee the openness and honesty necessary for them to make an informed decision," Congressman Yarmuth said.  "We must take action now to ensure that our nation's retirees receive the benefits of a life-time of work."