When the stock market hit its all-time high in October 2007, few investors questioned the merits of their 401(k) plan. Two years later, their feelings are different.

As many investors continue to nurse the wounds of losing more than a third of their retirement savings, many question if there isn't a fundamental flaw in 401(k) plans. Should the system be scrapped and replaced with something without all the risk?

Though the volume of the calls for change have quieted a bit as the stock market soared about 60 percent since March, legions of investors remain anxious their 401(k) might them down again.

There are several ideas floating around Congress that include increased disclosure of fees in mutual funds and new regulations about 401(k) investment advice.

Michael Townsend, as vice president of legislative and regulatory affairs for Charles Schwab & Co., analyzes government proposals to determine how they would affect individual investors. He offers insight into what's under consideration.

Q: Is the discussion of retirement savings a high priority in Washington?

A: There's no question that retirement savings issues are on the radar screen, but they definitely don't rise yet to the level of the big-ticket issues that we're watching _ like health care reform and the overhaul of financial regulations. What might, or might not, happen with retirement savings is somewhat dictated by what happens to other big-ticket issues and whether there will be time to focus on retirement accounts.

There are a couple of proposals both at the legislative level in Congress and on the regulatory side. In the 401(k) space, fees and investment advice top the list.

Q: Let's take the fee disclosure issue first. This legislation forces companies operating mutual funds within a 401(k) plan to clearly disclose management and other fees. What's the status of this proposal?

A: There's a House bill that contains both fee disclosure language and investment advice provisions. It has moved through the Education and Labor Committee, chaired by Rep. George Miller of California (D).

Advocates of the changes are waiting to see what the Ways and Means Committee does with it. Some lawmakers believe action may be taken in December, but something's more likely to happen in the early part of 2010. There has not yet been a ton of momentum on this issue on the Senate side. While the House may move a bill it's not at all clear where this ranks on the priority list in the Senate.

Q: You mentioned investment advice is also a part of the bill, but isn't the Department of Labor also developing similar rules as part of its regulatory responsibilities?