In addition to activity percolating at the agency, two House bills would require greater disclosure of 401(k) fees charged to participants and plan sponsors.

About 52 million Americans have defined-contribution plans, which hold $7.5 trillion in assets.

With the House set to adjourn for the year in mid-November, it’s unlikely that 401(k) fee legislation will advance far this year. But because the issue is being pursued on dual tracks, companies should gird for directives from Washington.

“The fact that change is coming is beyond doubt,” says James Delaplane Jr., a partner with Washington law firm Davis & Harman, at the Pensions & Investments West Coast Defined Contribution Conference earlier this month.

Delaplane estimates a 35 percent chance that Congress will approve 401(k) fee legislation before the end of 2008. It’s more likely that the DOL will act first.

That’s good for the industry, Delaplane says, because a regulatory approach is more flexible and easier to amend as the market changes.

“Most people are wary of legislating disclosure details through statute,” he says.

At a recent congressional hearing, Bradford Campbell, assistant secretary of labor for the Employee Benefits Security Administration, urged Congress to let the agency complete its work before moving ahead with legislation.

The DOL is developing three regulations—expanding disclosure to the public as well as service pro¬viders and participants—that will be final- ized before the end of the Bush administration.

Campbell says there is no debate about the need to increase 401(k) fee transparency.

“Everyone agrees on what we’re trying to achieve,” he says. “The question is: How do we get there?”

One route that companies and service pro¬viders don’t want to take is a bill written by Rep. George Miller, D-California and chairman of the House Education and Labor Committee.

Miller asserts that opaque fees are undermining retirement security and contributing to what Democrats call the “middle-class squeeze.”

Miller’s measure would require itemization of at least 12 expenses for each investment option. It would also mandate that an index fund be offered as an alternative in each plan.

Industry advocates say Miller’s approach could overwhelm participants with too much information and potentially scare them away from retirement saving.

“It takes a very granular, line-item, disaggregated approach to fees,” Delaplane says.

A less stringent disclosure bill was recently introduced by Rep. Richard Neal, D-Massachusetts. It could become the foundation for an alternative bill in the House Ways & Means Committee.

While legislation and regulations develop, industry advocates stress that fees are not necessarily a bad thing, if they finance plans that provide a good return and encourage participants to save more.

“We can’t forget the value side of the equation,” says Tom Kmak of Fiduciary Benchmarks Inc. “I don’t think we’re at commodity status yet. We are not soybeans; we are not petroleum.”