U.S. Rep. George Miller (D-California) is delivering pies to members of the Senate Finance Committee this morning to graphically illustrate how much hidden 401(k) fees can slice out of your retirement income.
Miller, sponsor of legislation to disclose hidden 401(k) fees, wants the Senate to restore requirements in the American Jobs and Closing Tax Loopholes Act that would demand clear disclosure of how much you're paying for 401(k) plan administration and other costs. Senator Max Baucus stripped the fee disclosures out of the bill last week. (See Senate Moves to Keep 401(k) Fees Hidden).
Fees can have a dramatic impact on your savings and the income you're able to generate in retirement, Miller said. A Department of Labor analysis estimates that a 1 percentage point difference in fees can cut your retirement income by 28%, in fact. That's the point of the pies Miller is delivering, which will have one big slice missing.
Miller is not demanding that fees be cut, incidentally. He's simply expects them to be disclosed so that participants and sponsors can clearly see what they're paying and determine whether the product is worth the cost.
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