Are fees draining your 401(k) retirement savings?

"For most mid to large 401(k) plans, the fees are very reasonable," Hess says.

Hewitt, which administers more than 100 large-company 401(k) plans, estimates that mid- to large-plan fees range from about 0.4% to 0.9% annually, based on a plan participant's investments.

A recent survey that included small and large 401(k) plans said that the fees, including record keeping, administration and investment management, range from 0.35% of assets to 1.72% of assets, according to the ICI.

Workers paying too much?

The industry needs to be changed because 401(k) plan providers too often explain fees in unintelligible ways and hide excessive fees, says Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee. That makes it difficult to know if workers are paying too much. To address the issue, the committee has approved a bill, 401(k) Fair Disclosure and Pension Security Act, which Miller says may pass the House this fall.

Miller's bill would require employers to break down fees into four categories, including administrative expenses, investment management, transaction costs and all other fees.

The Senate Special Committee on Aging also has introduced a bill to require fee disclosure. Although it's unclear how soon plan participants would see a change in the law, it seems inevitable that this year or next enhanced disclosure will occur, says Reish.

Meanwhile, the Labor Department is moving forward with a regulation it proposed last year. Like Congress, it would clarify 401(k) fees and require more disclosure.

"We all have the same goal in mind," says Phyllis Borzi, assistant secretary of Labor at the Employee Benefits Security Administration.

The Labor Department's proposal is further along and doesn't need to be voted into law, so it may be in effect sooner than congressional bills. But because the Labor Department has statutory constraints, it's still important for Congress to stay focused on the fee issue, says the Profit Sharing/401k Council of America.

"We are committed to improving the transparency in the 401(k) process and to ensuring all workers can achieve a secure retirement," says Secretary of Labor Hilda Solis.

Some experts and employees are worried that industry lobbyists may water down the bills.

"Congress might bow to pressure from organizations and then change it in a way that isn't good," says Dennis Frailey, who lives in Fairview, Texas, and works for a defense contractor.

4,500 plans rated

One company, BrightScope, saw an opportunity to step in and offer 401(k) plan employers and employees plan analysis.

The small, California-based start-up rates 4,500 401(k) plans. Its goal is to have 30,000 plans rated by year's end. The site recently started to offer more detailed information to employers for a fee, but the basic information to employees is free.

Anyone can click on the website and look up their employer's 401(k) plan rating. BrightScope crunches the data from public resources and compiles a large database of information. Under the rating is a general description of fees, company contributions, mutual fund investment options and other factors.

The service also compares the plan rating with a number of other company plans in the same industry peer group. The website makes every company open to public scrutiny. Workers can look up any company's 401(k) rating, not just their own plan.

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