Bill Overview
Title: Informed Savers Act
Description: This bill requires the Department of Labor to review the fee disclosure requirements associated with the administration of defined contribution retirement plans.
Sponsors: Rep. Wild, Susan [D-PA-7]
Target Audience
Population: People enrolled in defined contribution retirement plans
Estimated Size: 100000000
- Defined contribution retirement plans include savings plans such as 401(k)s, 403(b)s, and 457(b)s, which are popular in various countries but especially prevalent in the United States.
- Globally, millions of people participate in defined contribution plans as a part of their retirement savings strategy.
- The legislation's impact is primarily financial as it involves fee disclosures associated with plan administration.
- Participants in these plans and employers who offer these retirement savings options will be directly impacted by any changes or requirements set forth by the bill.
Reasoning
- The budget for the policy suggests targeting components like creating better disclosure systems and communication strategies, which will likely affect administrative processes.
- The target population, comprising nearly 100 million US citizens in defined contribution plans, means that the effects of the policy would be widespread, though the intensity of impact will vary.
- Fee transparency may improve trust and potentially lower costs, thus improving financial security, which can positively impact wellbeing.
- It's also important to include interviews with people who might not notice changes immediately or at all, since not everyone will scrutinize fee disclosures.
Simulated Interviews
Financial Analyst (New York, NY)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I think any policy that creates more transparency in fee structures is beneficial.
- Perhaps this will put pressure on providers to lower fees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Retired School Teacher (Miami, FL)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I find fee structures confusing already, so more clarity would be helpful.
- I hope this leads to fewer fees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Software Engineer (San Francisco, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 9/20
Statement of Opinion:
- I view transparency as a positive, but I'm more focused on overall return.
- This policy may not directly affect my strategy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Marketing Specialist (Chicago, IL)
Age: 27 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I don't think I'm contributing enough to be really affected by fee changes right now.
- More info is always good, though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Small Business Owner (Dallas, TX)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- If this makes it cheaper to offer these plans, it's great for my business and employees.
- More requirements could mean more admin burden, though.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Non-Profit Director (Portland, OR)
Age: 59 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 5/20
Statement of Opinion:
- I'm hopeful that greater transparency can also ensure ethical investment practices.
- I'm cautious but optimistic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Healthcare Worker (Atlanta, GA)
Age: 45 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 4/20
Statement of Opinion:
- Policies that improve clarity could mean more money stays in my account.
- It's a step in the right direction.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
Construction Worker (Denver, CO)
Age: 48 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- I'm not sure how these changes would affect me, but maybe it'll save me money in the long run.
- Hopefully, my employer can explain this better if it happens.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Research Scientist (Boston, MA)
Age: 52 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I'm very supportive of regulations that emphasize transparency.
- This could be a great opportunity for ethical standards enhancement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 8 |
IT Consultant (Seattle, WA)
Age: 55 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- As someone with various investments, fee transparency is always welcome.
- This probably increases the attractiveness of traditional plans for diverse portfolios.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $10000000 (Low: $5000000, High: $15000000)
Year 3: $10000000 (Low: $5000000, High: $15000000)
Year 5: $10000000 (Low: $5000000, High: $15000000)
Year 10: $10000000 (Low: $5000000, High: $15000000)
Year 100: $10000000 (Low: $5000000, High: $15000000)
Key Considerations
- The bill's impact will vary based on existing fee structures and practices in defined contribution retirement plans.
- The effectiveness of the fee disclosure enhancements will depend on compliance and enforcement by the Department of Labor.