WASHINGTON--Employers sponsoring 401(k) and other individual account-based defined contribution plans will be able to comply with proposed Labor Department regulations to improve disclosure of plan fees and expenses, but they will need more time, experts say.

In addition, certain problems posed by the regulations need to be resolved before employers will be able to comply fully, experts say.

The proposed regulations, published July 23 in the Federal Register, are intended to improve disclosure of fees and expenses for investments in participant-directed individual account plans, such as 401(k) plans.

While much of that information already is available to participants, it often is scattered or not presented clearly, federal officials say.

"Workers need clear and concise information, not dozens of pages of 'legalese' about the investment options available under their plans, and they would benefit greatly from having that information in a comparative format," Secretary of Labor Elaine Chao said in a statement.

The Labor Department said the centerpiece of its proposal is a requirement that plan sponsors develop and distribute to participants a comparative chart with investment-related information, including fees and expenses.

In its proposed regulations, the Labor Department has developed a model chart, which employers could adopt, though employers also could develop their own charts.

The Labor Department's model chart is comprised of two parts. The first part would list by category the name of each investment option, such as stock funds or bond funds; the Web site for each investment option; the average annual total return over the last year, five years and 10 years; and rates of return for a benchmark index applicable for each fund.

The second part of the chart would list each investment option, its total operating expenses and fees that participants are charged. Examples include sales charges on amounts invested or redeemed, charges imposed on amounts withdrawn before maturity and service fees that some mutual funds impose for accounts with balances less than a certain amount.

Aside from the comparative chart, employers also would have to disclose when employees become eligible to participate in the plan and provide an annual description of fees and expenses charged to participants for plan administrative services. Information also would have to be disclosed on how the charges are allocated to individual accounts.

Finally, employers would have to disclose to participants on a quarterly basis the actual dollar amounts charged to their accounts during the preceding quarter for specified administrative expenses.

The proposed rules come at a time of increased scrutiny of fees paid by 401(k) plan participants. More than a dozen employers have been sued for charging participants paid excessive fees. Those suits still are pending.

In addition, House Education and Labor Committee Chairman George Miller, D-Calif., has led the charge to improve 401(k) plan fee disclosure.

That drive has been fueled by the enormous growth of the plans--the Labor Department estimates there are 65 million participants in 437,000 account-based plans--and concerns that participants lack sufficient information to compare the fees among various investment options.

By improving fee and expense disclosure, participants will save $6.1 billion between 2009 and 2018, the Labor Department estimates.

Benefit experts agree that improved 401(k) plan fee and expense disclosure is needed, but they have numerous concerns about the Labor Department's proposal that, if approved, would go into effect for plan years beginning on or after Jan. 1, 2009.

The most immediate concern, experts say, is employers need more time to get the necessary information from fund vendors and to prepare the disclosure forms.

"The challenge is to put everything together in the right format. A very significant effort is going to be required. It is going to take more time" than is being proposed, said Cindy Milsted, an attorney with Hewitt Associates L.L.C. in Lincolnshire, Ill.

In addition, some fee and expense information could be difficult for employers to obtain from fund vendors. For example, stable-value fund providers frequently do not provide expense information, and in cases where a stable value fund is backed by an insurance company's general account assets, the information rarely is provided, said Alan Vorchheimer, a principal with Buck Consultants L.L.C. in New York, but added that the problem will be resolved eventually.

"Plan sponsors will have to work with vendors to see that all the information is available," said Robyn Credico, director of defined contribution consulting at Watson Wyatt Worldwide in Arlington, Va.

Another problem is that for some investment options--company stock being the best example--it will be difficult, if not impossible, for employers to provide a benchmark index to participants, Mr. Vorchheimer said.

With greater fee and expense disclosure, another challenge for employers will be to step up investment education, said Marina Edwards, a senior consultant with Towers Perrin in Chicago.

For example, some plan participants may veer away from certain investment options because of high fees, not understanding that those funds produce greater investment returns than others in similar categories.

Comments on the Labor Department proposal are due by Sept. 8.