Even though he s only 26, Grant Harris diligently shovels 6 percent of each paycheck into his 401(k) retirement plan. But for all his prudence, Harris gets rewarded with frustration. The human resources consultant has no idea how much his plan really charges to manage his money. And some of the investment decisions seem downright arbitrary. Harris owned a fund that invested in stocks from India, China and other growing parts of the globe. But a few months ago, when he opened up his account statement, he found that the fund was gone and his money had been moved to a U.S. stock fund. When he brought the matter up with his company s payroll department, Harris says, they were just as surprised as he was.

The 401(k) has become as commonplace at work as the cubicle and about as loved. Americans have socked away more than $3 trillion in 401(k) accounts, yet they too often can t answer basic questions. Why are all of the mutual funds in my plan from one company? Why can t I buy cheap exchange-traded funds? How much does the plan really cost? Some workers have clashed with, and even sued, their employers over these issues. Congress has turned up the heat on the financial industry, and federal regulators are looking at ways to curb retirement-plan costs.

But analysts say there s some good news: All the dissatisfaction is forcing retirement-plan sponsors to start making changes. Already some companies are offering lower-cost plans, openly disclosing fees and providing simpler-but-savvier investment options. We asked financial planners and retirement experts what changes they applaud and what still needs to be fixed. Here s their take on what separates the stronger plans from the lemons and how to make the best of any plan.

Scrutinizing the Fine Print

If you asked a group of 401(k) investors how much their plans cost, says Waltham, Mass., financial adviser Rick Miller, half of them wouldn t know, and the other half would say there are no fees. Many financial companies that run 401(k) plans are compensated through revenue-sharing agreements with the mutual funds in the plan, which pay them part of the fees they collect from investors. But for workers, deciphering those agreements is frustrating at best.

The federal government is now leaning on plan providers to make their fees clearer, and some companies are starting to comply. One firm, Putnam Investments, says it will soon fully disclose 401(k) fees; when investors check their accounts online, they ll be able to see what they pay for plan administration as well as fund-management fees and loan-maintenance fees, says Edmund F. Murphy, head of Putnam s defined-contribution business. The Labor Department expects to issue industrywide guidelines about fee disclosure later this year.

Fighting Sticker Shock

Many companies are becoming more cost-conscious about the funds they offer, says Pam Hess, director of retirement research at Hewitt Associates, a human resources consulting firm. Often that means replacing the retail versions of fund shares, which ordinary investors can buy, with cheaper institutional shares. It costs $1,580 a year, on average, to invest $100,000 in retail shares of U.S. stock funds, compared with $1,000 a year to invest the same amount in institutional shares, according to Lipper. Compounded over 35 years, the difference could be tens of thousands of dollars to employees in the plan.

But planners say the largest employers those with 401(k) plans worth $1 billion or more may be able to save more by getting rid of mutual funds entirely. Some large companies have created their own investment pools called separately managed accounts, or collective trusts and negotiated lower management fees. Hess says workers shouldn t balk if their employers make that kind of move. Funds with lower fees outperform funds with higher fees, she says.

Finding More Options

Some 401(k) plans look a lot like the old-time coal-town company store, where miners bought everything from chicken wire to soap from the mining company. Similarly, some plans offer funds from just one company, often the same company the employer hired to run the plan. These one-stop shops irk Dave Boike, president of Retirement Resources, a financial-planning firm in Flint, Mich. No one fund company has the best of everything, he says.

Experts say workers who are stuck in a plan with a limited menu of funds do have options. If the plan has a good lineup of core funds those that focus primarily on assets like large-cap stocks or intermediate-term bonds the workers can do their core investing in the plan and use their own separate IRA for alternative strategies. Keep in mind, though, that while 401(k) fees have their critics, buying the same funds through an IRA can often cost more.

Fewer Funds, More Alternatives

Throughout the 1990s investors clamored for and generally got more investing options in their 401(k) plans. But after rising steadily for three decades, the average number of funds in 401(k) plans is trending down, to a current average of around 17. That s happening in part because many employers think having too many choices was confusing employees and discouraging them from investing a premise that recent research supports.

Still, some firms are giving employees other options in the form of brokerage accounts within their 401(k)s, which allow investors to trade nearly any type of asset. One in four plans now offers a brokerage option, up from 18 percent two years ago, according to Hewitt. Employees face additional fees with these accounts, on top of any commissions on trades. But Miller, the financial planner, says it might be worth spending the extra money in a brokerage account if a 401(k) plan has a poor selection of funds.