Hearing of the House Committee on Education and Labor- H.R. 3185, The 401(K) Fair Disclosure For Retirement Security Act Of 2007
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REP. ROBERT ANDREWS (D-NJ): Thank you. We have read your testimony. We appreciate it, and this is the lightening round. So Mr. Scanlan, am I correct in reading your testimony that you do think there should be a distinction between what is disclosed to plan sponsors and what is disclosed to participants? Is that correct?
MR. SCANLAN: Yes, and let me explain that. We believe that plan sponsors, being fiduciaries, are in a position to disclose information to their participants --
REP. ANDREWS: Got it.
MR. SCANLAN: -- in a format that allows comparability --
REP. ANDREWS: Right.
MR. SCANLAN: -- and allows the individual participant to make the best choices against other competing choices within the --
REP. ANDREWS: I do appreciate that. I didn't want to rush you. Mr. Minsky, Mr. Scanlan suggests a disclosure to employees. If I understand it, it has three pretty simple categories, record keeping, money management, and other. What's wrong with that? What would be wrong with presenting those three generic categories?
MR. MINSKY: I'm not sure that anything is inherently wrong with that. I guess the devil is in the details with regard to other. My only concern is that we not provide participants with disclosure that confuses them and ultimately leads to them making irrational decisions.
REP. ANDREWS: And finally, very quickly, Mr. Thomasson, do you support requiring funds to offer an index fund as one of the options for investors?
MR. THOMASSON: Thank you, congressman. I might pass that over to Mr. Chambers as the investment advisor.
REP. ANDREWS: Do you, Mr. Chambers?
MR. CHAMBERS: Frankly sir, I don't believe that it's necessary, but at the same time, I think that index funds would be far more prevalent in 401(k) plans than they are today if H.R. 3185 were enacted, simply because the disclosures would lead people to select index funds more than do today.
REP. ANDREWS: Thank you very, very much gentlemen. Thank you.
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