<nobr>Oct 30, 2007</nobr>

ERIC Urges Congress to Wait for DOL to Finish Work Before Moving New Fee Disclosure Legislation

Washington, D.C. -- Lew Minsky, Senior Attorney for the Florida Power and Light Company, testified today on behalf of The ERISA Industry Committee (ERIC), Profit Sharing/401k Council of America (PSCA), National Association of Manufacturers (NAM), and U.S. Chamber of Commerce (Chamber) before the House Ways and Means Committee on 401(k) plan fee disclosure.

Minsky's testimony emphasized that major employers support efficient and effective fee disclosure, but strongly believe that Congress should allow the Department of Labor to complete its work on fee disclosure before determining whether legislation is needed. He also reviewed a comprehensive set of disclosure principles developed jointly by ERIC, PSCA, NAM, the Chamber, and eight other employer groups.

"Major employers are concerned that missteps on fee disclosure could inadvertently damage the defined contribution retirement system and threaten the retirement security of millions of workers," Minsky testified.

Minsky testified that employers are extremely concerned that new fee disclosure requirements could sharply increase litigation threats. In his testimony, he said ERIC and other employer groups "are extremely concerned about the misuse of fee disclosure requirements as the basis for litigation fishing expeditions. . . . These often-groundless allegations do great damage to the 401(k) system."

In addition, Minsky argued that the cost of any new disclosure requirements must be justified by their benefits, and that the various bills currently pending in the House would create voluminous disclosures at substantial cost without a corresponding benefit to plan participants.

"Such disclosure would dramatically increase the administrative costs paid by plan participants while overwhelming them with information that is of little practical value as they make the decision to participate in the 401(k) plan and the decision of which investment option to select," Minsky testified.

Minsky expressed an overarching concern that in the rush to do something about alleged abuses in 401(k) fees, Congress risks doing great harm if they do not move slowly, deliberately, and with substantial input from plan sponsors about the affects of potential legislation.

"It would be a tragic irony if an attempt to improve the ability of plan participants to make good investment decisions ultimately were to lead to higher costs and lower participation in the retirement system," Minsky concluded.

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For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400
Fax: (202) 789-1120
E-mail: tgodbout@eric.org
www.eric.org



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Ways and Means Testimony

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