Banks also will have to compete on investment management fees with firms including Vanguard, which pioneered low-cost index investing for individuals. The Valley Forge, Pa.-based mutual-fund manager charged an average 0.19% for its target-date funds, according to a 2010 report by Morningstar. Target-date funds are the most popular investment in 401(k) plans for workers who don't choose their own lineup.

The 0.62% average fee for Wells Fargo's target-date series was more than three times Vanguard's cost. Fidelity's expense ratio was 0.71% and JPMorgan's, 0.85%, according to Morningstar.

Held Hostage

"There are a lot of individuals who are held hostage to a bunch of mediocre, or worse, funds," in their 401(k) plans, particularly among plans that only offer investments from their recordkeeper, said Adam Bold, founder of the Mutual Fund Store, a registered investment advisor based in Overland Park, Kan., with $6.1 billion under management. "Over the last few years there's been a trend toward more plans giving open platforms, where investors have more choice," he said.

The banks' push for more of workers' savings may mean less revenue for the top-three 401(k) administrators, Fidelity, Aon Hewitt and Vanguard, which together had 43% of the market at the end of 2009, compared with a combined share of less than 10% for Bank of America, JPMorgan and Wells Fargo, according to Cerulli.

''Upping the Ante''

"We've been upping the ante on retirement," Andy Sieg, head of retirement services for Bank of America Merrill Lynch said in a January interview at Bloomberg headquarters in New York. The Charlotte, N.C.-based bank added about $88 billion in 401(k) assets from its 2009 acquisition of Merrill Lynch, according to Card, the bank spokesman. The bank has been beefing up its retirement-services staff with executives brought over from Fidelity and other rivals, including Rich Linton, who had overseen Fidelity's adviser retirement group and now has a similar role with Bank of America.

JPMorgan roughly doubled its sales force dedicated to retirement plans in the last year, according to Falcon. Wells Fargo has been adding new features that allow employers to more closely track the savings and investing behaviors of their employees, said Laurie Nordquist, director of Institutional Retirement and Trust for the San Francisco-based bank.

Banks are searching for new ways of making money as losses on mortgages and regulation on fees have limited their revenue sources, said Terry Moore, managing director of the North America banking practice for Accenture Plc, a consulting firm based in Dublin.

Interest Income Declines

Interest income for the largest 25 U.S. banks was down 15% in 2010 compared with 2007, Moore said. Regulation requiring consumers to opt in for overdraft checking protection will cost banks an estimated $5.6 billion annually, according to Pleasanton, Calif.-based Javelin Strategy & Research.