7 hot 401(k) trends - by Liz Pulliam Weston (2)

About half the employers Hewitt surveyed said they were looking into ways to reduce plan costs.

Even a 1% difference in fees adds up over time. Hewitt estimates that someone with a $49,000 balance in a plan could wind up with $82,000 less at retirement if expenses average 1.5% over 30 years instead of .5%.

More employers are also balking at providers who trap their workers in poorly performing proprietary funds, the 401(k) experts said.

The caveat: There are still plenty of 401(k) providers out there charging unconscionably high fees and not giving workers good low-cost options, like index or institutional funds.

Your game plan:If your employer doesn't already have your 401(k) costs broken out on your statement, ask for that -- and consider pushing for a provider change if your only options are high-cost mutual funds or (worse yet) annuities.

Stemming cash-outs

As I mentioned in "The 7 most common 401(k) blunders," the second-worst thing you can do with a 401(k) -- after not contributing -- is cashing out when you leave a company. Yet that's exactly what 45% of workers do.

To help stop this nonsense, more employers are making it harder to get your hands on the cash. Instead of sending checks to departing workers, 40% of the employers Hewitt surveyed said they roll balances of $1,000 or more over automatically into an IRA. (Additionally, 48% of the employers say they offer the option of leaving balances over $1,000 in the plan.)

The caveat: Automatic rollovers won't stop the truly determined from breaking into their retirement piggy banks.

Your game plan: Even if your company still opts to send you a check, be sure to deposit it directly into an IRA. Whatever you're tempted to spend it on now almost certainly isn't as important as your retirement.

Getting some advice

Companies used to balk at the idea of telling their employees how to invest, fearful (as always) that they'd get sued. So millions of confused workers have been trying to figure it out on their own, sometimes with disastrous results (Enron, anyone?).

Labor Department guidance and the spread of inexpensive Internet options is gradually making companies more comfortable with the idea, however. Hewitt found 25% of large-company employers offer individualized advice either online, over the phone or in person-to-person consultations. Another 44% of employers said they were either very or somewhat likely to add advice in the coming year.

The caveat: The online providers can be a bit complicated to use, and offline providers might not be able to give advice about a worker's other holdings, such as IRAs and college funds. The option many workers would prefer, in-person hand-holding, isn't widely available.

Your game plan: If your company offers an advice option, take advantage of it. You don't have to follow the recommended game plan, but at least you're getting a second opinion and could get early warning of problems with your portfolio. If you're not getting any help, consider seeking out some fee-only help from a provider such as MyFinancialAdvice.com or The Garrett Planning Network.

Implementing the Roth 401(k)

Employers aren't exactly falling over themselves to offer the new Roth 401(k)s, but that could change as workers begin to understand their value.

Roth 401(k)s are a twist on the traditional 401(k) that allows workers to make after-tax contributions to their plans. Instead of getting a tax break on your contributions up front, you can get a potentially bigger one down the road: all the money withdrawn from a Roth 401(k) in retirement is tax-free.

Some financial experts have opined that most workers, except those close to retirement, would be better off contributing to a Roth 401(k) than a traditional 401(k).

"It's going to complicate the investment decision process," noted Hewitt's Lucas. "I wouldn't be surprised to see people getting pretty confused and needing a lot of modeling tools (to help make their decisions)."

So far, though, the issue is academic for most workers. Only 17% of the 425 companies surveyed by the Profit-Sharing/401(k) Council said they would implement one within the next year or so. Another 41% were considering the possibility, so the option may become more widespread as employers get used to the idea and financially-sophisticated workers start demanding the option.

The caveat: Some employers offering the Roth 401(k) are putting restrictions on the plan. One in five, for example, said they won't match Roth 401(k) contributions, Hewitt's research shows. One in four won't allow loans, and 37% won't allow withdrawals.

Your game plan: If the Roth 401(k) option is offered, seriously consider putting at least some money there. Just make sure you're getting the full company match on your traditional 401(k) contributions first and don't commit any money you're likely to want back before retirement.