[Federal Register Volume 62, Number 200 (Thursday, October 16, 1997)]
[Notices]
[Pages 53802-53803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27431]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration


Public Hearing on 401(k) Plan Fees

AGENCY: Pension and Welfare Benefits Administration, Department Of 
Labor.

ACTION: Notice of public hearing.

-----------------------------------------------------------------------

SUMMARY: The purpose of this Notice is to inform interested persons 
that the Department will be holding a public hearing on November 12, 
1997 to obtain information relating to investment management, 
administration and other fees charged to 401(k) plans and participants. 
The Notice invites interested persons to testify at the hearing and/or 
make a written submission of their views and/or data relating to 401(k) 
plan fees. The information obtained from the hearing and written 
comments will assist the Department in assessing the availability of 
information regarding plan fees and expenses charged to individual 
401(k) plan accounts to plan fiduciaries and participants, the extent 
to which plan fiduciaries and participants consider such information, 
and what action, if any, is necessary to address the identified 
problems.

DATES: The public hearing regarding fees charged to 401(k) plans is 
scheduled for Wednesday, November 12, 1997, and, if necessary, for 
Thursday, November 13, 1997. The hearing will begin at 10 a.m. on both 
days. Requests to testify at the hearing and written comments should be 
received by the Department no later than November 3, 1997. Oral 
presentations will be limited to 15 minutes, but an extended statement 
may be submitted for the record. Individuals with disabilities, who 
need special accommodations, should contact Debra Golding by November 
3, 1997, at the address indicated in this Notice.

ADDRESSES: Requests to testify at the hearing and written comments 
should be submitted to: Debra Golding, Pension and Welfare Benefits 
Administration, Room N-5669, U.S. Department of Labor, 200 Constitution 
Avenue, NW., Washington, DC 20210. All submissions will be open to 
public inspection at the Public Documents Room, Pension and Welfare 
Benefits Administration, U.S. Department of Labor, Room N-5638, 200 
Constitution Avenue, NW., Washington, DC 20210. The hearing will be 
held in Room S-4215 A-C, 200 Constitution Avenue, NW., Washington, DC 
20210.

FOR FURTHER INFORMATION CONTACT: Debra Golding, Office of Regulations

[[Page 53803]]

and Interpretations, Pension and Welfare Benefits Administration, U.S. 
Department of Labor, Room N-5669, 200 Constitution Avenue, NW., 
Washington, DC 20210, (202) 219-8671. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: In recent years there has been a tremendous 
growth in the number of defined contribution plans, especially section 
401(k) plans. A number of questions have been raised in the media and 
elsewhere with respect to the fees and expenses currently being charged 
to 401(k) plans and their participants. In 1996, the Advisory Council 
on Employee Welfare and Pension Benefit Plans included a Working Group 
on Guidance in Selecting and Monitoring Service Providers which 
considered, among other areas, the selection and monitoring of 
investment service providers to small 401(k) plans. Recently, questions 
have been raised as to whether 401(k) plans are being overcharged for 
certain services; whether fees charged to plans are hidden; whether 
plan sponsors are doing enough to protect plan participants from 
excessive fees; and whether participants understand what fees and 
expenses are being charged to their accounts. In an effort to consider 
these questions, the Department is conducting a public hearing and 
inviting public comment on current practices relating to fees and 
expenses charged to 401(k) plans. Among other comments, the Department 
is interested in obtaining information in the following areas:
    1. In selecting and monitoring service providers, are employers/
plan sponsors being furnished with sufficient information to evaluate 
whether the fees and expenses associated with plan investments, 
investment options, and administrative services are reasonable? If not, 
what additional information should be provided to or requested by plan 
sponsors and is it readily available? What steps are plan sponsors 
taking to ensure that the fees and expenses charged to the individual 
accounts of the participants are reasonable?
    2. Are plan participants being furnished with sufficient 
information about the fees and expenses associated with the investment 
options offered under their plan to make informed investment decisions? 
What additional information should be provided to or requested by 
participants and is it readily available?
    3. Is the information regarding services, fees and expenses that is 
disclosed to participants regarding their accounts provided in a manner 
understandable to most participants? Is the disclosure automatic or 
upon request? If automatic, how often is the disclosure provided and to 
whom is it provided (plan sponsor and/or participants)?
    4. How are the services and the respective fees included in a 
bundled fee arrangement disclosed? How are the fees and expenses with 
respect to each of the covered services in a bundled arrangement 
determined?
    5. What actions, if any, should the Department take to improve 
consideration and disclosure of fees and expenses charged to 401(k) 
plans? If action is necessary, what information should be required to 
be disclosed? Would a uniform format for such disclosure be helpful to 
participants?

Notice of Public Hearing

    Notice is hereby given that a public hearing regarding fees charged 
to 401(k) plans is scheduled for Wednesday, November 12, 1997 and, if 
necessary, Thursday, November 13, 1997. The hearing will begin at 10 
a.m.

    Signed at Washington, DC, this 9th day of October, 1997.
Olena Berg,
Assistant Secretary, Pension and Welfare Benefits Administration.
[FR Doc. 97-27431 Filed 10-15-97; 8:45 am]
BILLING CODE 4510-29-P