There are two good reasons why the odds are in favor of better disclosure of 401(k) fees: one, a mounting number of lawsuits by participants against plan sponsors over excessive fees; and two, Congress is now getting involved. But what form the increased disclosure takes is still up for grabs, and as one might expect, there is nothing close to consensus about what's necessary.

The American Society of Pension Professionals & Actuaries (ASPPA) recommends that Congress should require all companies servicing 401(k)s to provide full and complete disclosure of fees. This will ensure that sponsors and participants have the opportunity to compare fees of various service providers, which will lead to a more competitive market and reduced costs. The Government Accountability Office has also backed supporting full disclosure.

But not everyone thinks more is better; in fact, some suggest that more disclosure just may be more confusing, particularly in the case of information for individuals. For instance, if a plan participant finds out that one provider is more expensive than another, should he switch plans? But then what if the more expensive plan is performing much better? Will it be a net win to move? If individuals are unable to really work with the information, will the plan sponsor become more vulnerable to legal action?

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