Every working American deserves access to the information he or she needs to make good decisions about how to save for retirement. It’s that simple.
That’s why we here at the Middle Class Task Force are excited that today, the Department of Labor is announcing new rules that will help make this principle a reality by requiring 401(k) providers to disclose key information to plan participants about their fees and expenses. It also makes sure that plan providers present investment options in a clear, apples-to-apples way that will help the 72 million participants in 401(k)-style retirement plans make better choices. It’s a common-sense step toward improving the retirement security of American workers, and it’s one we should all be able to get behind.
Retirement security has been one of the Middle Class Task Force’s top priorities since day one. When the President created the Task Force less than two weeks after he took office, retirement security was one of the topics he explicitly assigned us to focus on.
So we’ve been working on ways to strengthen the retirement security of American workers ever since. When we released our first annual report earlier this year, we wrote about a number of retirement security proposals, including an idea for helping workers automatically save money in Individual Retirement Accounts; an improved tax credit for retirement savings; and a set of new regulations to improve the transparency and reliability of 401(k)s.
The fee disclosure rule that our Administration is announcing today is one key piece of that agenda. By requiring 401(k) providers to disclose their fees and expenses to the workers who use their products to save for retirement, this rule will bring more transparency to the system and make sure workers know what they’re getting.
And by giving workers the information they need to be better-informed consumers of retirement savings products, the rule will help ensure that their retirement savings aren’t eroded by high fees and expenses, so they can get the most out of every dollar they put away.
We’ll keep working on new ways to strengthen retirement security for American workers. But today, we’re happy that this Administration is taking one more step to give you the tools you need to make informed choices about how to save for the retirement you deserve.
Jared Bernstein is Chief Economic Advisor to the Vice President