Retirement and Pensions

WASHINGTON, D.C. – The Government Accountability Office (GAO) today recommended that better monitoring and reporting requirements are needed to protect pension plans covering 10.4 million current and future retirees participating in multiemployer plans.

“Congress and the Obama administration must work together to address the significant problems GAO raised in order to protect retirees and the nation’s taxpayers,” said U.S. Rep. George Miller (D-Calif.), chair of the House Education and Labor Committee. “With millions of families’ retirement security dependent on these plans, it is vital that federal agencies have timely information to assess the health of multiemployer plans.”

WASHINGTON, D.C. – U.S. Rep. George Miller (D-CA), chair of the House Education and Labor Committee and author of 401(k) fee disclosure legislation, issued the following statement on the Department of Labor’s final rule released today requiring increased disclosure of fees 401(k) participants pay.

“I am pleased that the Department of Labor has taken another step to expose hidden fees contained in America’s 401(k) plans.  While families are making difficult choices to put something away for their retirement, it is essential that they know how fees may be eating away at their savings and potentially delaying their retirement plans.

“Americans are understandably anxious about their retirement savings. This requirement is intended to provide accountholders with the critical information to make informed choices for their retirement future. I will continue work with the department on additional efforts to ensure fee disclosure through regulation and continue to push for my legislation that would codify these consumer protections into law for all 401(k)-style plans.”

There is currently no requirement for Wall Street to disclose how much in fees it takes out of Americans’ 401(k)-style accounts. With more than 50 million Americans relying on these plans to finance their retirements, hidden fees can make a big difference in families’ retirement security. According to the Department of Labor, a one-percentage point difference in fees would reduce overall retirement income by 28 percent over a lifetime of saving.  Morningstar recently found that low fees were the number one predictor of good investment performance.

The 401(k) fee disclosure provisions were part of legislation approved by the House of Representatives in May.

Yesterday’s New York Times posed important questions to readers:

“Investing is scary these days. Is it safe to go back in the stock market? Is the bond market the place to be? With so much uncertainty, how can investors know where to put their money?"

Choosing between investment options can be a daunting task, especially when considering the 401(k) investments that finance the majority of American workers’ retirements. Chairman Miller introduced legislation earlier this year to require Wall Street to disclose how much money in fees it takes from Americans’ 401(k) plans, as there is currently no law requiring such disclosure. The vast majority of account holders do not know how much Wall Street middle men are taking from their retirement accounts in fees – nearly 1/3 of their total value in some cases.

The New York Times editorial board explained this problem and endorsed Miller’s legislation to protect investors:

“Unfortunately, fee disclosure is still lacking for investments made through 401(k) retirement plans. The Department of Labor, which oversees the plans, is finalizing a rule that will require more disclosure by plan providers, like mutual funds, to employers. It also plans to issue further rules to ensure disclosure to employees.

“Those are moves in the right direction, though investor protections would be even more secure if enacted into law. A bill that would require fees to be clearly disclosed on investors’ statements passed the House recently as part of a larger jobs bill. But as so often happens these days, the provision was stripped in the Senate. Representative George Miller, Democrat of California and sponsor of the measure, has pointed out that it does not mandate how much providers can charge and would cost taxpayers nothing. What it would do is alert both employers and employees to the often substantial amounts that fees siphon from workers’ accounts and, in that way, give them the information they need to shop and bargain for the best deal.

“When lawmakers return from summer break, they should bring the measure up again for a vote, and pass it without further delay.”

If you support Chairman Miller’s work on 401(k) fee disclosure, please feel free to join our Facebook page.

An editorial in today’s San Francisco Chronicle urged stronger 401(k) fee disclosure rules and praised Chairman Miller’s work on the issue. The Chronicle wrote:

“Rep. George Miller, a Contra Costa County Democrat who chairs a House committee that deals with pensions, wants to clarify the ever-growing world of employee-directed savings plans, especially as companies dump traditional fixed-payment pensions. He favors requiring plain-English disclosure of pension choices and a list of fees printed on periodic statements. Good as these ideas are, they were shot down in the Senate after passing the House. Score one for the power of mutual funds, which oppose the reforms.

“The Labor Department changes are still a major improvement. But they aren't bolted into legal statute the way a Congress-passed law would be, and the fee disclosures won't take effect until next summer. Miller should try again.

“The 401(k) approach is built on individuals making the best choices for their retirement. But this idea works best only if investors have all the facts. Washington needs to provide rules to help workers make the right decision.”

Important 401(k) fee disclosure provisions were part of the American Jobs and Closing Tax Loopholes Act (H.R. 4213), legislation that the House of Representatives approved and sent to the Senate on May 28, 2010. After fee disclosure provisions were eliminated during Senate deliberations, Chairman Miller sent pies (yes, pies) to each member of the Senate Finance Committee. Each pie was missing a large slice – nearly 1/3 of the pie – to represent fees Wall Street regularly takes from American families.

Last month, the Labor Department created interim rules that require greater 401(k) fee disclosure. While Chairman Miller was pleased with the Department’s efforts, he pledged once again to “continue to fight for my legislation that would codify these consumer protections into law for all 401(k)-style plans.”

WASHINGTON, D.C. – U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, called on the Pension Benefit Guaranty Corporation to immediately address serious concerns raised by the agency’s inspector general that an auditing contractor hired by the agency has failed to exercise due diligence and that PBGC failed to properly oversee the contractor. Miller asked the inspector general to look into the termination of the United Airlines plans in 2009.

On Tuesday, July 20, 2010, the Health, Employment, Labor and Pensions Subcommittee of the Education and Labor Committee held a hearing on “Creating Greater Accounting Transparency for Pensioners”. The subcommittee explored the increasingly common practice of investing private sector pension funds in hedge funds and private equity funds, and assess if these pension plans receive adequate, transparent accounting information from these funds. The federal government does not specifically limit or monitor private sector pension investment in hedge funds or private equity.

Tuesday, July 20: Committee to Investigate Pension Fund Transparency

Tomorrow, Tuesday, July 20, 2010, the Health, Employment, Labor and Pensions Subcommittee of the Education and Labor Committee will hold a hearing on “Creating Greater Accounting Transparency for Pensioners”. The subcommittee will explore the increasingly common practice of investing private sector pension funds in hedge funds and private equity funds, and assess if these pension plans receive adequate, transparent accounting information from these funds.  The federal government does not specifically limit or monitor private sector pension investment in hedge funds or private equity.

WHAT:         
Hearing on “Creating Greater Accounting Transparency for Pensioners”

WHO:           
Barbara Bovbjerg, U.S. Government Accountability Office, Washington, D.C.
Robert Chambers, McGuireWoods LLP, Charlotte, N.C.
Matthew D. Hutcheson, Professional Independent Fiduciary, Eagle, Idaho
Jack Marco, Chairman, Marco Consulting Group, Chicago, Ill.

WHEN:         
Tuesday, July 20, 2010
10:00 a.m. EDT
Please check the Committee schedule for potential updates »

WHERE:      
House Education and Labor Committee Hearing Room
2175 Rayburn House Office Building
Washington, D.C.

Note: This hearing will be webcast live from the Education and Labor Committee website.


Wednesday, July 21: Full Committee Markup of Miner Safety and Health Act of 2010 (H.R. 5663)

Full Committee Markup
10:00 AM, July 21, 2010
2175 Rayburn House Office Buidling
Washington, DC

On Wednesday, July 21, the Education and Labor Committee will consider legislation to reform our nation’s mine health and safety laws. The Miner Safety and Health Act (H.R. 5663) would provide stronger tools to ensure that mine operators with troubling safety records improve safety and empower all workers to speak up about safety concerns.

Massey Energy’s Upper Big Branch explosion in April killed 29 miners and highlighted serious flaws in existing laws including the difficulty of the Mine Safety and Health Administration to bring tougher sanctions against the country’s most dangerous mines.

If the answer is "twenty-eight percent," what's the question?

Q1: What percentage of Americans will be insured under the new health insurance reform law?
Q2: How much can a one-percentage point difference in 401(k) fees reduce overall retirement income over a lifetime of saving?
Q3: What's the percent of Committee Members up for re-election in 2010?
Q4: How much has age discrimination increased?

Continue reading for the answer.

WASHINGTON, D.C. – U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, today called on the U.S. Senate to add back 401(k) fee provisions stripped out of jobs legislation last week. To illustrate the issue, Miller had a pie delivered to each Senator sitting on the Finance Committee with nearly a third of the pie taken out representing the fees Wall Street takes from accountholders. According to a Department of Labor calculation, a one-percentage point difference in fees would reduce overall retirement income by 28 percent over a lifetime of saving.

“Every day, hardworking families make the difficult decision to set aside their earnings to provide for their retirement,” said Miller. “The Senate should side with middle class Americans who want to know the facts about fees and charges that threaten their retirement savings.”

Important 401(k) fee disclosure provisions were part of the American Jobs and Closing Tax Loopholes Act (H.R. 4213), legislation that the House of Representatives approved and sent to the Senate on May 28. Last week, Sen. Max Baucus proposed changes to the legislation that included the elimination of the requirement that 401(k)-type plans disclose all fees that participants pay.

Pies were delivered to each Finance Committee Senator today with a slice missing representing the fees Wall Street takes from 401(k) accountholders. According to a Department of Labor bulletin, a one-percentage point difference in fees would reduce overall retirement income by 28 percent over a lifetime of saving.  

TO WATCH AN ARCHIVED WEBCAST OF A PRESS CONFERENCE ON THIS ISSUE, CLICK HERE.


Created with flickrSLiDR.

Important 401(k) fee disclosure provisions were part of the American Jobs and Closing Tax Loopholes Act (H.R. 4213), legislation that the House of Representatives approved and sent to the Senate on May 28. Last week, Sen. Max Baucus introduced proposed changes to the legislation that included the elimination of the requirement that 401(k)-type plans disclose all fees that participants pay.

At a press conference that just concluded, U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, asked that Senate put the fee disclosure requirements back into H.R. 4213.

“The Senate should side with middle class Americans who want to know the facts about fees and charges that threaten their retirement savings, and restore these critical provisions,” Miller said.

Miller was joined at the press conference by: U.S. Rep. Rob Andrews (D-NJ), chairman of the Health, Employment Labor and Pensions Subcommittee; Karen Friedman, policy director, Pension Rights Center; Cristina Martin-Firvida, director of economic issues, AARP; and Christian E. Weller, senior fellow, Center for American Progress, and associate professor of public policy, University of Massachusetts Boston. Watch everyone's statements on our YouTube page.

U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee and lead sponsor of 401(k) fee disclosure legislation, will have pies delivered to each Finance Committee Senators on Wednesday with a slice missing representing the fees Wall Street takes from accountholders. According to a Department of Labor bulletin, a one-percentage point difference in fees would reduce overall retirement income by 28 percent over a lifetime of saving.  

The 401(k) fee disclosure provisions were part of the American Jobs and Closing Tax Loopholes Act (H.R. 4213), important legislation that the House of Representatives approved and sent to the Senate on May 28. Last week, Sen. Max Baucus introduced proposed changes to the legislation that included the elimination of the requirement that 401(k)-type plans disclose all fees that participants pay.
 
Miller called the elimination of important reforms to expose hidden 401(k) fees “unacceptable” and vowed to fight to include the reforms. 

There is no requirement for Wall Street to tell accountholders how much they take out of Americans’ 401(k)-style accounts. With more than 50 million Americans relying on these plans to finance their retirements, hidden fees can make a big difference in families’ retirement security.

WHAT:         
Press Conference on 401(k) fee disclosure provisions in H.R. 4213 with 23 pies to be delivered to Senate Finance Committee Members

WHO:            
U.S. Rep. George Miller (D-CA), chairman, House Education and Labor Committee
U.S. Rep. Rob Andrews (D-NJ), chairman, Health, Employment, Labor and Pensions Subcommittee
Karen Friedman, policy director, Pension Rights Center
Cristina Martin-Firvida, director of economic issues, AARP
Christian E. Weller, senior fellow, Center for American Progress, and associate professor of public policy, University of Massachusetts Boston 

WHEN:         
Wednesday, June 16, 2010
1:00 p.m. EDT                       

WHERE:       
House Education and Labor Committee Hearing Room
2175 Rayburn House Office Building
Washington, D.C.

Note: This press conference will be webcast live from the Education and Labor Committee website.

WASHINGTON, D.C. – U.S. Rep. George Miller (D-CA), the chair of the House Education and Labor Committee, today said that the U.S. Senate’s proposed elimination of important reforms to expose hidden 401(k) fees was “unacceptable” and vowed to fight to include the reforms. 

WASHINGTON, D.C. – 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).

“It is beyond time that Americans have basic, clear and timely information on the costs and choices contained in their 401(k) plans,” said U.S. Rep. George Miller (D-CA), the chair of the House Education and Labor Committee. “Guaranteeing complete and simple disclosure of fees will help give Americans a fighting chance to strengthen their retirement and increase our nation’s future economic security.”

Update: The American Jobs and Closing Tax Loopholes Act was passed by the House of Representatives on May 28, 2010.

The House of Representatives is expected to vote this week on the American Jobs and Closing Tax Loopholes Act (H.R. 4213), a measure that would help the nation continue along the path of economic recovery and job growth.

A year and a half ago, this country was suffering from a recession created by years of extreme economic and fiscal policies under the previous administration.  Nearly 800,000 jobs a month were being lost when President Obama was sworn into office. 

Thanks to the Recovery Act, we are now seeing positive job gains.  Job losses have turned to jobs gains of 290,000 in April 2010—the largest gain in four years and a 1 million job swing from the end of the Bush administration. This marks the fourth month of job growth with 573,000 American jobs added since December—84% in private sector.

We are finally headed in the right direction, but still have more work to do.  This legislation builds on this positive growth by continuing crucial help for families still dealing with the aftermath of the recession and financial scandals.

Among other things, the bill: assists unemployed workers, funds summer jobs, provides pension relief, and gives the more than 50 million workers who depend on 401(k) type plans clear and complete information on the fees they pay. 

Protecting Americans’ Retirement Security

A majority of American workers rely on 401(k)-style plans to finance their retirements. Most account holders report that they 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:

The Health, Employment, Labor, and Pensions Subcommittee of the House Committee on Education and Labor held a hearing Wednesday to examine H.R. 3721, the Protecting Older Workers Against Discrimination Act. The legislation would restore civil rights protections for older workers stripped away by the U.S. Supreme Court’s 2009 decision, Gross v. FBL Financial. In Gross, the Supreme Court overturned well-established precedent – making it harder for older workers facing age discrimination to enforce their rights.

H.R. 3721 corrects the unnecessary lawmaking of the Supreme Court.  H.R. 3721 overturns Gross and restores the law to what it was prior to the decision, by allowing older workers to prove age discrimination by showing that age was a motivating factor in the decisions made by their employer, but not necessarily the sole factor.

Protections against age discrimination are especially important to workers who may be facing layoffs in an uncertain economic climate. The court’s ruling specifically means that victims of age discrimination face a higher legal burden of proof than those alleging race, sex, national origin or religious discrimination.

WASHINGTON, D.C. – U.S. Reps. George Miller (D-CA), chairman of the House Education and Labor Committee, and Rob Andrews (D-NJ), chairman of the pensions subcommittee, today issued a statement on a Department of Labor proposal to protect workers’ retirement from investment advisors who have a direct financial interest in the products they recommend. Vice President Joe Biden announced the proposal today as part of the Middle Class Task Force’s annual report. 

WASHINGTON, D.C. – Secretary of Labor Hilda Solis told the House Education and Labor Committee today that the U.S. Department of Labor is both helping the economy recover and improving American workers’ lives by strengthening basic workplace protections, and training workers for new and better jobs.

The Health, Employment, Labor and Pensions Subcommittee of the House Education and Labor Committee held a hearing on Wednesday, December 2 to examine how the 2005 bankruptcy of the automotive parts manufacturer Delphi has impacted workers and retirees.

The Health, Employment, Labor and Pensions Subcommittee of the House Education and Labor Committee will hold a hearing on Wednesday, December 2 to examine how the 2005 bankruptcy of the automotive parts manufacturer Delphi has impacted workers and retirees.

WHAT:          
Hearing on “Examining the Delphi Bankruptcy’s Impact on Workers and Retirees”

WHO:            
U.S. Sen. Sherrod Brown (D-OH)
U.S. Rep. Christopher Lee (R-NY)
U.S. Rep. Tim Ryan (D-OH)
U.S. Rep. Michael Turner (R-OH)
Charles Cunningham, former Delphi worker
Bruce Gump, former Delphi worker
Norman Stein, professor, University of Alabama School of Law; and senior consultant, Pension Rights Center

WHEN:         
Wednesday, December 2, 2009
10:30 a.m, EST
Please check the Committee schedule for potential updates »
                        
WHERE:       
House Education and Labor Committee Hearing Room
2175 Rayburn House Office Building
Washington, D.C.

Note: This hearing will be webcast live from the Education and Labor Committee website. Access the webcast when the hearing begins at 10:00 am EDT » 

Rep. Rob Andrews, chair of the Subcommittee on Health, Employment, Labor and Pensions, last night discussed the Government Accountability Office finding that 40 executives at ten high-profile corporations that terminated their workers’ pensions collected at least $350 million in compensation in the years leading to pension termination. The investigation was requested by Rep. George Miller, chairman of the House Education and Labor Committee.

WASHINGTON, D.C. – Forty executives at ten high-profile corporations that terminated their workers’ pensions collected at least $350 million in compensation in the years leading to pension termination, the Government Accountability Office reported today. The investigation was requested by U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee.

The Wall Street Journal has an article today about how small 401(k) plans often pay big fees. In an effort to ensure transparency, the Committee passed the 401(k) Fair Disclosure and Pension Security Act of 2009 to the House floor in June of this year. This bill will help small business owners like Mr. Maccani:

Some small employers say that it’s difficult to get a handle on exactly what they pay in fees, and that it often requires digging through documents or calling the various parties involved.

Gordon Maccani, chief executive of Digital Telecommunications Corp., in Van Nuys, Calif., says he thought he was paying only $3,600 a year to a third-party recordkeeper to manage his company’s 15-year-old 401(k) plan, which has about $920,000 in assets and 38 participants.

But Mr. Maccani says he recently started reviewing his annual plan statements from Transamerica Retirement Services and noticed there’s an array of other fees paid out of assets, including a 1.2% “contract asset fee,” $8,500 in “charges and fees” and about $1,400 in partner distribution fees. He originally didn’t get a clear answer, he says, when he called the company to inquire. But Transamerica called Mr. Maccani and gave him a comprehensive fee breakdown after being contacted by The Wall Street Journal. The company is a unit of Transamerica Life Insurance Co., owned by Aegon NV, a multinational Dutch insurance firm.

Transamerica’s recently provided breakdown shows Digital Telecommunications’ 401(k) plan actually paid about $16,300 in fees last year.

We encourage you to read the entire article and learn more about the 401(k) Fair Disclosure and Pension Security Act of 2009.

A majority of American workers rely on 401(k)-style plans to finance their retirements. According to an AARP survey, the vast majority of account holders report that they do not know how much Wall Street middle men are taking from their retirement accounts.

These hidden fees can greatly reduce workers’ retirement account balances. In fact, 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. Especially during these difficult economic times, workers need simple and complete information in order to make better educated decisions about their retirement plans. 

Workers also deserve investment advice regarding their employer-sponsored retirement plan that is independent and free from any conflicts of interest.  Protections against providing conflicted investment advice were watered down by the Pension Protection Act and a midnight proposal rushed through by the Bush administration’s Department of Labor. These actions opened the door for financial services companies to provide advice to employees where they had a direct or indirect financial interest.

The 401(k) Fair Disclosure and Pension Security Act (H.R. 2989), passed by the Committee on June 24, 2009, would, among other things, address hidden fees and restore workers' protections against conflicted investment advice.  H.R. 2989 would:

WASHINGTON, D.C. – American workers would receive clear and complete information about fees that could be cutting deeply into their 401(k)-style retirement savings under legislation approved today by the House Education and Labor Committee.

By a vote of 29 to 17, the committee approved the 401(k) Fair Disclosure and Pension Security Act (H.R. 2989), which would help workers shop around for the best retirement investment options by providing information on how much in fees is taken from their retirement accounts. Current law does not require disclosure of certain fees, and even for fee information that is available, it can be difficult for workers to find and evaluate.

Marketplace radio has a story about H.R. 2989, the 401(k) Fair Disclosure and Pension Security Act of 2009. It lays out the reasons for more transparency in 401(k) fees.

As 401ks continue to weaken in a rough economy, lawmakers are paying closer attention to what they can control: the buried fees. Over a lifetime, 401k fees can add up to a six-figures number.

No doubt 401ks have taken a beating in the economic downturn. Retirement plans have lost an estimated $2 trillion -- and that's brought more attention to the buried fees charged by 401k plans. Today, a House committee takes up legislation that would address those fees.

Here's Marketplace's Dan Grech.

On Wednesday, June 24, the House Education and Labor Committee will vote on legislation to ensure that American workers have clear information about fees that could be cutting deeply into their 401(k)-style retirement savings.

The 401(k) Fair Disclosure and Pension Security Act of 2009 (H.R. 2989) is new legislation that combines provisions from the recently approved fee disclosure and investment advice bills (H.R. 1984 and H.R. 1988). The bill also includes modest adjustments to pension funding rules in order to ensure plans can weather the economic crisis without being forced to choose between cutting jobs or freezing plans.

WHAT:          
Mark-up of H.R. 2989 “The 401(k) Fair Disclosure and Pension Security Act of 2009”
 
WHO:            
The House Education and Labor Committee

WHEN:          
Wednesday, June 24, 2009
10:30 a.m. EDT
Please check the Committee schedule for potential updates »

WHERE:       
House Education and Labor Committee Hearing Room
2175 Rayburn House Office Building
Washington, D.C.

WASHINGTON, D.C. -- The Subcommittee on Health, Employment, Pensions and Labor of the House Education and Labor Committee today approved legislation by a 13 to 8 vote to protect workers from conflicts of interest when receiving retirement investment advice at work.

WASHINGTON, D.C. – The House Subcommittee on Health, Employment, Pensions and Labor today approved landmark legislation by a 13 to 8 vote that would expose hidden 401(k) that may be eating into Americans’ retirement security. The bill will be considered by the full Education and Labor Committee.

The 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984) will help workers shop around for the best retirement options by requiring simple fee disclosure on the investment options contained in their employer’s 401(k) plan. Current law does not require all fees workers pay to be disclosed; and even for information that is available, it can be difficult for workers to find and evaluate.

The Conflicted Investment Advice Prohibition Act of 2009 (H.R. 1988) would restore federal safeguards that ensured that investment advice provided to workers on their employer-sponsored retirement plan be independent and free from any conflicts of interest. Unfortunately, these protections were watered down with the approval of the Pension Protection Act of 2006 and former Bush administration Department of Labor midnight proposed regulations. These actions opened the door for financial services companies to provide advice to employees where they had a direct or indirect financial interest. The Conflicted Investment Advice Prohibition Act will restore workers’ protections by laying out clear rules to ensure that workers who receive investment advice at work be based on interests of the account holder’s needs, not Wall Street’s pockets.

The Health, Employment, Labor, and Pensions Subcommittee will be voting on H.R. 1988 tomorrow.

On Wednesday, June 17, the Health, Employment, Labor and Pensions Subcommittee of the House Education and Labor Committee will vote on two bills to improve workers’ retirement security: The 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984), legislation to ensure that American workers have clear and complete information about fees that could be cutting deeply into their 401(k)-style retirement savings; and the Conflicted Investment Advice Prohibition Act of 2009 (H.R. 1988), which would ensure that if workers receive investment advice at work, it be free from conflicts of interest.

WHAT:          
Mark-up of H.R. 1984, “The 401(k) Fair Disclosure for Retirement Security Act” and H.R. 1988, “The Conflicted Investment Advice Prohibition Act of 2009”
 
WHO:            
The House Education and Labor Committee

WHEN:          
Wednesday, June 17, 2009
10:30 a.m. EDT
Please check the Committee schedule for potential updates »

WHERE:       
House Education and Labor Committee Hearing Room
2175 Rayburn House Office Building
Washington, D.C.
 

WASHINGTON, DC -- U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, today announced that the committee is opening an investigation of potential improprieties by the former director of the federal Pension Benefit Guaranty Corporation, Charles E. F. Millard, based on a draft report of the PBGC’s Inspector General.

“The House Education and Labor Committee is looking into very serious questions raised by the PBGC Inspector General that the former head of the PBGC had inappropriate contacts with Wall Street contractors. Our committee takes these issues seriously and we plan to review this matter thoroughly,” said U.S. Rep. George Miller.

The Health, Employment, Labor, and Pensions Subcommittee of the House Education and Labor Committee held a hearing on Wednesday, April 22 on legislation that will provide American workers with clear and complete information about Wall Street fees taken from their 401(k)-style accounts.

The 401(k) Fair Disclosure for Retirement Security Act of 2009 will help workers shop around for the best retirement options by requiring simple fee disclosure on the investment options contained in their employer’s 401(k) plan. Current law does not require all fees workers pay to be disclosed; and even for information that is available, it can be difficult for workers to find and evaluate.

The bill was introduced on Tuesday, April 21, 2009 by Rep. George Miller (D-CA), chairman of the full committee, and Rep. Rob Andrews (D-NJ), chairman of the subcommittee.

Hidden 401(k) fees were the subject of Sunday’s 60 Minutes and featured an interview with Rep. Miller. To watch the segment, click here.

Myth: H.R. 1984 will require too much disclosure and will confuse 401(k) participants.

Fact: H.R. 1984 would require clear and simple fee disclosure so that workers can make sound investment decisions for themselves. The biggest problem currently facing workers with 401(k) plans is that there is too little disclosure of fees, not too much. Plan participants should be presented with the facts and then be allowed to make their own decisions.

Myth: Fees on 401(k)s are already adequately disclosed.

Fact: There is no one place that 401(k) plan participants can go to find out about the fees they are paying. Information that is available is difficult to find and difficult to read. As a result, a 2007 survey by the AARP found that roughly 80 percent of plan participants were not aware how much in fees were taken out of their 401(k)s.

WASHINGTON, DC – Leading House Democrats on 401(k) issues introduced legislation today that will provide American workers with clear and complete information about Wall Street fees taken from their 401(k)-style accounts. The Health, Employment, Labor, and Pensions Subcommittee of the House Education and Labor Committee will hold a hearing on the legislation Wednesday.

A majority of American workers rely on 401(k)-style plans to finance their retirements. According an AARP survey, the vast majority of account holders report that they do not know how much Wall Street middle men are taking from their retirement accounts.

These hidden fees can greatly reduce workers’ retirement account balances. In fact, 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. Especially during these difficult economic times, workers need simple and complete information in order to make better educated decisions about their retirement plans.  

Workers should have the right to know how much Wall Street middle men siphon off from their savings. The 401(k) Fair Disclosure for Retirement Security Act (H.R. 1984) will provide workers with clear and complete information about the fees they are paying to help them make the best investment decisions for their future retirement security.  (Click here to view the bill text) Specifically, H.R. 1984:

The Health, Employment, Labor, and Pensions Subcommittee will hold a hearing on Wednesday, April 22 on legislation that will provide American workers with clear and complete information about Wall Street fees taken from their 401(k)-style accounts.

The 401(k) Fair Disclosure for Retirement Security Act of 2009 will help workers shop around for the best retirement options by requiring simple fee disclosure on the investment options contained in their employer’s 401(k) plan. Current law does not require all fees workers pay to be disclosed; and even for information that is available, it can be difficult for workers to find and evaluate.

The bill is expected to be introduced today by Rep. George Miller, chairman of the full committee, and Rep. Rob Andrews, chairman of the subcommittee.

Hidden 401(k) fees were the subject of Sunday’s 60 Minutes and featured an interview with Rep. Miller. To watch the segment, click here.

Steve Kroft's story about retirement insecurity, especially among those 55-65 years old, ran on 60 Minutes last night. Mr. Kroft highlighted some of the concerns about 401(k)s as the primary source of retirement income. In doing so he interviewed Chairman Miller about the hidden fees in many 401(k) programs.

"There clearly has been a raid on these funds by the people of Wall Street. And it's cost the savers and the future retirees a lot of money that would otherwise be in their account, independent of the financial collapse," Rep. George Miller [D-CA] said.

Congressman Miller is chairman of the House Committee on Education and Labor, and a staunch critic of the 401(k) industry, especially its practice of deducting more than a dozen undisclosed fees from its clients' 401(k) accounts.

"Now you got a bunch of economic wizards jumping in and taking money out of your retirement plan, and they don't wanna tell you how much, you can't decipher it in simple English, and they're not interested in disclosing it, or having any transparency about it," Miller told Kroft.

"And most of the people that look at their 401(k)s have no idea that these fees are being taken out?" Kroft asked.

"No. Where would you find it? Where would you find these fees in this prospectus? You can look on any page you want, and when you're all done reading it, and you will find some of the fees and the commissions here, but you won't find them all, and I'll bet you won't find half of 'em," Miller said.

There are legal fees, trustee fees, transactional fees, stewardship fees, bookkeeping fees, finder's fees. The list goes on and on.

Miller's committee has heard testimony that they can eat up half the income in some 401(k) plans over a 30-year span. But he has not been able to stop it.

"We tried to just put in some disclosure and transparency in these fees. And we felt the full fury of that financial lobby," he said.

David Wray, a lobbyist for the 401(k) industry, says he favors disclosing the fees, but his partners in the financial industry don't.

Asked if he thinks most people know these fees exist, Wray said, "I think they know that there are fees. They don't know exactly how large they are."

"Why do you think the financial services industry is opposed to fee transparency?" Kroft asked.

"I don't know that they're opposed to it. I think the issue is that…," Wray replied.

"You don't think they're opposed to it?" Kroft asked. "You're a lobbyist in Washington, right? You know they're opposed to it. …George Miller hasn't been able to get a bill to the floor."

"I think they want to keep the systems as simple and not make changes. They like the way things are. And whenever you push people out of their comfort zones, you know, it's an issue," Wray replied.

"I mean, they're comfortable with the situation because they're making a ton of money or they have made a ton of money," Kroft said.

"Well, and their systems are set up in certain ways. You know, this is gonna be a big change," Wray replied.

Watch the entire 14-minute segment below:

This Sunday, 60 Minutes will air a segment on how the economic crisis is affecting workers’ 401(k)s and retirement security, featuring an interview with Chairman George Miller. 60 Minutes airs on CBS at 7 pm eastern.

View the brief clip previewing the segment below.

Rep. George Miller (D-Calif.) believes the many fees extracted from 401(k) accounts are adding insult to injury for millions of Americans whose accounts have been decimated by stock losses and whose retirements are now in jeopardy.

Miller talks to 60 Minutes correspondent Steve Kroft for a report on how the recession is affecting 401(k) retirement plans to be broadcast this Sunday, April 17, 2009.

"There clearly has been a raid on these funds by the people of Wall Street and it has cost the savers - and the future retirees - a lot of money that would otherwise be in their accounts, independent of the financial collapse," says Miller, the chairman of the House Committee on Education and Labor. The chairman also dislikes the hidden nature of the more-than-a-dozen fees that most Americans are not fully aware are being skimmed off their 401(k)s. "And I'll bet you won't find half of them here," he tells Kroft, holding out a prospectus from a popular mutual fund found in many 401(k) portfolios.

The various fees can include legal fees, trustee fees, transactional fees, stewardship fees, bookkeeping fees, sales fees, asset management fees, investment management fees, investment advisor fees, finder's fees and many more.

Miller has been trying to curb what he considers excessive fees. "We tried to just put in some disclosure and transparency in these fees and we felt the full fury of the financial lobby," he says. (From CBSNews.com)

Preserving and strengthening 401(k)s is nothing new for Chairman Miller and the Education and Labor Committee. In 2007, the Committee passed the 401(k) Fair Disclosure for Retirement Security Act of 2007 (H.R.3185). In late 2008, the Committee helped suspend a tax penalty for seniors who did not take a minimum withdrawal from their depleted retirement accounts in 2009, and in February held a hearing regarding how to strengthen worker retirement security.

Many of the issues Chairman Miller discusses in the 60 Minutes segment will be discussed at the Health, Employment, Labor, and Pensions Subcommittee hearing regarding the 401(k) Fair Disclosure for Retirement Security Act of 2009 at 10:30 AM on April 22, 2009.

You will be able to watch the live webcast here.

The Health, Employment, Labor and Pensions Subcommittee of the House Education and Labor Committee will hold a hearing on the importance of ensuring that if workers receive investment advice, that it be independent and free of financial conflicts of interest.

In the last days of the Bush administration, the Department of Labor proposed to allow financial services firms to offer potentially conflicted investment advice on workers’ retirement accounts. For more information on this proposal, click here.

The Obama administration has slowed the consideration of this midnight rule.

The Health, Employment, Labor and Pensions Subcommittee will hold a hearing on Tuesday, March 24 on the importance of ensuring that if workers receive investment advice, it be independent and free of financial conflicts of interest.

In the last days of the Bush administration, the Department of Labor proposed to allow financial services firms to offer potentially conflicted investment advice on workers’ retirement accounts. For more information on this proposal, click here.

The Obama administration has slowed the consideration of this midnight rule.

WASHINGTON, D.C. – The economic collapse has uncovered problems in our nation’s retirement systems that must be addressed to ensure that Americans can enjoy a safe and secure retirement, witnesses told the House Education and Labor Committee today.

“The current economic crisis has exposed deep flaws in our nation’s retirement system,” said U.S. Rep. George Miller (D-CA), chairman of the committee. “For too many Americans, 401(k) plans have become little more than a high stakes crap shoot. If you didn’t take your retirement savings out of the market before the crash, you are likely to take years to recoup your losses, if at all.”

In light of the current financial crisis, on Tuesday, February 24, the House Education and Labor Committee will begin a series of hearings to explore the shortcomings of our nation’s retirement system and look at solutions to ensure that Americans can enjoy a safe and secure retirement after a lifetime of hard work.

The first hearing will examine how the current economic crisis has highlighted existing weaknesses in the 401(k) retirement savings system.  As a result of economic conditions, older workers are putting off retirement plans, retirees are thinking about going back to work, current workers are reducing 401(k) contributions, and more are borrowing from their retirement savings to pay for basic necessities.

WASHINGTON, DC -- U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee, and Rep. Rob Andrews (D-NJ),  issued the following statement on final regulations issued by the U.S. Department of Labor today that may undermine retirement savings plans of millions of Americans. It will allow financial services firms to offer potentially conflicted investment advice on workers’ retirement accounts.

WASHINGTON, DC -- President Bush signed bipartisan legislation today to temporarily suspend a tax penalty for seniors who do not take a minimum withdrawal from their depleted retirement accounts in 2009, such as 401(k)s.

The Worker, Retiree and Employer Recovery Act (H.R. 7327), introduced by U.S. Reps. George Miller (D-CA), Charles B. Rangel (D-NY), Howard P. “Buck” McKeon (R-CA), and Jim McCrery (R-LA), suspends an Internal Revenue Service requirement for one year that account holders of 401(k)-style plans must withdraw a minimum amount of money every year after they reach 70 ½ years old.  This suspension would be available to everyone regardless of their retirement account balances.

WASHINGTON, DC -- The U.S. House of Representatives approved bipartisan legislation today that would temporarily suspend a tax penalty for seniors who do not take a minimum withdrawal from their depleted retirement accounts, such as 401(k)s.

The Worker, Retiree and Employer Recovery Act (H.R. 7327), suspends for one year an Internal Revenue Service requirement that account holders of 401(k)-style plans must withdraw a minimum amount of money every year after they reach 70 ½ years old.  This suspension would be available to everyone regardless of their retirement account balances.

WASHINGTON, DC -- Today, a Wall Street Journal editorial further perpetuated an active campaign that is blatantly misrepresenting Democratic efforts to preserve and strengthen Americans' retirement security. In light of these ongoing distortions, U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee, reiterated the committee's legislative priorities in preparation for the next Congress' efforts to help Americans enjoy a secure retirement.

The U.S. Pension Benefit Guaranty Corporation’s investment losses now total almost $5 billion in fiscal year 2008, according to information released at a Committee hearing today.

Earlier this week, the PBGC reported a $3.1 billion loss in equity investment in the first 11 months of fiscal year 2008. The September loss of $1.7 billion in stocks increased PBGC’s total losses for the fiscal year to $4.8 billion.

Today, I chaired a U.S. House Committee on Education and Labor hearing in San Francisco where we examined how the current financial crisis is affecting retirement savings.  Witnesses told us that after a lifetime of planning and saving, a growing number of retirees are facing shrinking 401(k)s and increasing insecurity as a result of the ongoing financial crisis.  While this crisis may have started on Wall Street, it's Main Street that stands to suffer the most. More than ever before, there is an urgent need to help Americans strengthen their retirement savings.

Chairman George Miller announced at a hearing today in San Francisco that the U.S. Pension Benefit Guaranty Corporation lost at least $3 billion in stock investments during the last fiscal year through August, and invested a significant portion of its funds in mortgage-backed securities. The losses were only partially offset by modest gains in other investment classes. It is likely that losses will be substantially worse after September results are reported.

This hearing, held in San Francisco, CA, further examined how the current financial crisis is impacting pension funds and workers’ directed retirement accounts, such as 401(k) plans.

On Wednesday, October 22, the Committee will hold a field hearing in San Francisco, California to further examine how the current financial crisis is impacting Americans’ retirement security, including pension funds and workers’ directed retirement accounts like 401(k) plans.   The Committee held a hearing on this topic on October 7 as part of a series of hearings House Democrats are conducting to look at the causes of the financial crisis and appropriate responses to it.

"The Impact of the Financial Crisis on Workers’ Retirement Security"
Scheduled on at 9:30 a.m. Pacific Time on Wednesday, October 22, 2008 in the San Francisco Board of Supervisors Legislative Chamber, Room 250, 1 Dr. Carlton B. Goodlett Place, San Francisco, CA.  Chairman George Miller will lead the hearing.

American workers have lost as much as $2 trillion in retirement savings over the last year – highlighting the devastating toll that the nation’s financial crisis is taking on their retirement plans, witnesses told the Committee today. Today’s hearing was one of several that House Democrats scheduled to investigate the causes of the financial crisis and what additional steps should be taken to protect taxpayers, homeowners, workers, and families.

“Unlike Wall Street executives, American families don’t have a golden parachute to fall back on,” said Chairman George Miller. “It’s clear that Americans’ retirement security may be one of the greatest casualties of this financial crisis.”

This statement was made today by Chairman George Miller at the House Education and Labor Committee's hearing on the "Impact of the Financial Crisis on Workers' Retirement Security."

Good afternoon.

Last week, Congress approved an emergency rescue plan in response to the worst financial crisis our country has seen since the Great Depression. We know that this plan alone will not magically turn the economy around. But we are confident that without it we will not have the chance to move forward.

We insisted that the plan include strong protections for taxpayers and tough accountability – neither of which was included in the President’s original request to Congress.

This hearing examined how the current financial crisis is impacting pension funds and workers’ directed retirement accounts, such as 401(k) plans. According to a recent poll by the Associated Press, more than half of all Americans are worried that the ongoing financial crisis will force them to postpone retirement.

The Committee today will hold a hearing to examine how the current financial crisis is impacting pension funds and workers’ directed retirement accounts, such as 401(k) plans. According to a recent poll by the Associated Press, more than half of all Americans are worried that the ongoing financial crisis will force them to postpone retirement.

"The Impact of the Financial Crisis on Workers' Retirement Security"
Scheduled at 1:00 p.m. on Tuesday, October 7, 2008, in room 2175 Rayburn H.O.B.

Stronger protections in federal law are needed to ensure that companies deliver on their promise to provide health care to retired workers, witnesses told the full committee today.  With insurance premiums skyrocketing and companies looking to cut expenses, an increasing number of companies have been rolling back or eliminating promised retiree health benefits. The Kaiser Family Foundation estimates that the share of large firms offering retiree health coverage fell by half between 1988 and 2005, from 66 percent to 33 percent.

This hearing explored options to safeguard promised retiree health benefits. With insurance premiums skyrocketing and companies looking to cut expenses, an increasing number of companies have been rolling back or eliminating promised retiree health benefits.

On Thursday, September 25, the full committee will hold a hearing to explore options to safeguard promised retiree health benefits. With insurance premiums skyrocketing and companies looking to cut expenses, an increasing number of companies have been rolling back or eliminating promised retiree health benefits.

“Safeguarding Retiree Health Benefits”
Thursday, September 25, 2008, 10:00 a.m. ET