I doubt R shares would ever convert. They are more like C shares that never convert than like B shares (with high but declining deferred sales charges).
The purpose of the higher fees is to pay servicing expenses, not sales expenses, so you would expect them to persist. A 401k plan administrator has to service all its investors (just like a third party brokerage selling funds), but also has additional regulatory filings and procedures to follow. An administrator will charge to cover its costs (and make some profit).
In my mind, the two questions are: what's a reasonable charge, and who should pay it (employer or employee)?
Consider that brokerages like Fidelity and Schwab charge funds 40 basis points for shelf space (NTF funds). By that measure (given the additional work required of 401k plans), the 50 basis points doesn't seem out of line. But I would argue that the brokerage NTF fees are themselves excessive, and that most of the regulatory stuff done by plan administrators is boilerplate/automated. By that measure, the 50 basis points is too high, and that is what I think.
Who should pay is not as obvious as: well, of course the employer should pay.
Employers, especially small companies, have limited budgets, and allocate so many dollars per employee. Those dollars can go toward salary, toward vacation time, toward desk space, toward benefits. Demand that they pay for the plan and perhaps you'll get a smaller match (if any).
Small plans cost more per employee (fixed costs amortized over fewer people). That's why large companies almost always pay for the plans, while small companies shift costs. They may use annuities (where the administrator gets paid out of the annuity fees) or R class shares as here, or ...
IMHO this isn't "evil", but it should be clearly disclosed and should be a reasonable amount.

@soaring, where/how do you buy it? M* lists $5M min. Appears unable to be bought at Fido and ML.

Bought QSPIX earlier this year (as recent as end of August) in 401k/403b accounts at Fidelity via their BrokerageLink. It was available for $500 minimum ($2,500 minimum in IRA), but the institutional class is no longer available for retail investors. QSPIX is now an advisor fund. I noticed this when my monthly contribution failed in September. They let me hold onto QSPIX, but I can't add to it. Class N QSPNX (1.75% ER - 0.25% higher than I) is still available at Fidelity $2,500 minimum NTF in tax deferred accounts. The stated minimum is enforced in a taxable account which is not suitable for this fund.

I have about 12-15% in cash, which amounts to about $140,000. Call me a wimp, but I don't feel comfortable investing it. I already have quite a lot of money in the market.

@willmatt72
I'd call you very smart, not a wimp.

I have about 12-15% in cash, which amounts to about $140,000. Call me a wimp, but I don't feel comfortable investing it. I already have quite a lot of money in the market.

The one (more aggressive) choice that leaps to mind is T.Rowe Price's Growth Stock Fund (PRGFX) ... R-Class would allow you to own Class A equivalent at Oppenheimer without paying the customary (near 5%) load.

I'll try again to describe loads.
Would you be as comfortable suggesting the RRGSX share class of TRP's Growth Stock Fund? That's what is being offered. These are R shares, with an ER nearly double that of PRGFX (an extra 0.50%, to be precise). Oppenheimer R shares likewise add 0.50% and cost more than their load-waived A shares found in some other 401k plans (and also NTF at several discount brokerages).
This extra 0.50% is taken out year after year, even if one switches funds within the 401k, since the all funds assess this fee (or something close to it).
That's a load. It goes into the pocket of the plan administrator. The SEC calls it a load, FINRA calls it a load. Over a decade, it's going to cost as much as a front end load.
That S&P Mid cap index fund? Here's its financial statement and its M* profile. J class management fee is just 0.07%. But oh, those administrative fees (think 12b-1), they add 0.63%, bringing the total ER up to 0.70. That gravy goes to the plan administrator.
Briefly on the investment options - if you don't like the actively managed options, the index funds cover the major areas, large cap (S&P 500 index), mid cap (S&P Mid Cap index), small cap (Russell Small Cap index), foreign (International index). They're cheaper than the other offerings (even at 0.7% or so ER), and should beat lackluster funds.
If you want to add some bond exposure and actively managed allocations, several people here have written positively about Blackrock Global Allocation (MRLOX), notably BobC, but also Bee, VintageFreak, myself, and others.
Yes folks, posts on the internet live forever :-)

@soaring, where/how do you buy it? M* lists $5M min. Appears unable to be bought at Fido and ML.

So to keep with the historical custom you cite, a better question would have been What percent of your total nut do you have in cash?
I was not expressing any opinion about privacy. It's not that I don't understand the issues. I was just surprised few were willing to answer a plain direct question but responded anyway.
Opinion weighting is an interesting notion. Not sure it applies so much in a situation where anyone could've said "I have 50k (or 25k, or 100k), about a year's worth for me." Whatever.

Hi proman. The 3 main drivers to winning the retirement savings game are to start saving early in your career, save as much as you can (10% of your income minimum) and have a diversified portfolio according to risk tolerance. I wouldn't agonize over fund choice too much. Fund choice IMO is a very distant contributor to the end-game compared to these other factors.
It would be my opinion that one of those Target Date funds would give you the allocation base you need. Use the retirement year as a guide, but make your decision based more on the funds stock/bond allocation. Take a look at how much these funds lost in 2008. Are you comfortable with short term loss knowing you don't need this money for another 30+ years? For example I see that the 2045 retirement fund, AOOIX, is about 78% stocks. It had a 1 year, 2008 loss of 33%. At 30 years old that might be a good choice for you, but you have to decide. If the fund is riskier then you can handle (based on 1 year loss potential) you may pull out at the very wrong time. If it doesn't have enough stock or risk at your age then you may be leaving a lot of money on the table 30 years from now.
Anyway, start with your allocation and then pick a few funds that get you to that allocation. And don't overlook the index funds when allotting, especially in the large cap area. And remember one fund like a Target Date fund might be all you need or at least be the core of your portfolio.
Save as much as you can and as soon as you can. That's the big deal. Good luck to you.
edit: oops, in my original post I used data from AAARX, the strategic fund. I changed the ticker to be AOOIX, the 2045 target date fund.

I have about half a year's living expenses in cash and short term investments. I'd say about 80% of that is straight cash. My wife holds another slug of money equivalent to about 25% of our annual living expenses, separately, in cash and conservatively-managed flexible stock/bond funds (roughly split 50 cash/50 funds).

@little5bee - LOL
We're near the end of our budget year, and had a lot of unanticipated expenses over the summer - so at the moment our checking accounts (at two local banks) contain less $$ than Dex's stated figure.

I haven't invested in it yet, but I'm rather drawn to PRAFX, TRP's real assets fund. Almost half the fund is real estate, the rest is materials, commodities and energy. It could serve nicely as an all-in-one diversifier for maybe 5% of a portfolio.
One important consideration about putting 5% of your portfolio into such a fund, or into REITs or preferreds, etc, is you must be willing to make a long-term allocation. Moving in and out of these areas is surefire way to lose money.

Hi proman:
Not familiar with AC's current lineup - though I did once invest with them and found them OK. Keep in mind that funds like the one you own (Aggressive is the tip-off here) are typically very volatile. Losses of 15-25% in a year followed by similarily large gains are not uncommon. Comes with the territory.
My sense is you'd be more at ease in some type of moderate allocation fund or a target date fund based on anticipated retirement year. And shucks ... There's nothing on your list along that line that I recognize or could recommend.
The one (more aggressive) choice that leaps to mind is T.Rowe Price's Growth Stock Fund (PRGFX). They're a great client-friendly house. And Lipper gives the fund its highest ratings. Another I've owned and liked is Oppenheimer's Global Growth (OPPAX). It also scores well at Lipper. R-Class would allow you to own Class A equivalent at Oppenheimer without paying the customary (near 5%) load. But be wary of many of Oppenheimer's other funds. You can lose a lot of money fast in some of them. And their allocation funds actually tack-on an extra "allocation fee", making them overly costly to own.
Please keep in mind that the two I mentioned specifically (at Price and Oppenheimer) are aggressive funds designed for long-term investors able to tolerate large swings in NAV.

l5b, no trash pickup (or sewerage) in our town; we pay for private pickup. Very well-paid teachers, though.
Interesting that almost nobody else answers the question and gives figures. Maybe I should delete mine.

Crash, the 5y figures I see on M* for annualized total return are 4.16% for DBLEX and 3.42% for PREMX, which makes some difference (top 7% vs. top 24%, five stars vs. four stars), and DBLEX is "low" on the risk rating vs. "average" for PREMX.
Padilla and Gundlach said at the outset, and have repeated frequently, that the objective of the fund is market return with lower risk, and looks like they've delivered.
Both are good funds, but DBLEX has been a little ahead on return: risk since inception.
Cheers, AJ

@VintageFreak, yes, they are FDIC insured ($250K limit per account). That was the first thing I checked. We did perfectly fine during 2000-2002 and 2008.
Money market funds work just like saving accounts, and pay very little. Nothing fancy. I prefer Vanguard short term investment grade bond, Admiral share, VFSUX, with SEC yield 1.97% and ER 0.10%.

A wise man once told me - at that time I didn't know he was wise - never invest more than half of your money regardless of how much money you have. This is completely contrary to any advice you will receive.
I am taking this advice. My "cash" position in my investment portfolio does not include 50% cash I have which I will never invest. I maximize my retirement accounts of course.

Vanguard is the perfect place to compare ETF and OEF, because they invest in the same underlying portfolio and their shares, say VIG and VDADX, and have identical ERs. This removes portfolio differences and ER differences, allowing one to see clearly the differences due strictly to the sales structure. It also demonstrates that with Vanguard, cost advantage is indeed illusory (#1).
With VDADX, you get exactly what you pay for (NAV). With the VIG ETF you may get more or less, and that difference varies from moment to moment and day to day (#5). Vanguard shows that as of now (market close, Oct 6) the ETF was trading at a $0.04 discount, so selling near day end would have netted you a few cents under NAV.
Actually, you likely would have lost another penny, because Vanguard (like most providers) gives the closing price of the ETF as the midpoint between bid and ask. VIG typically has a 2c spread, and depending on the Vanguard ETF, the typical spread can be as high as 0.20%. (#4).
Hidden expenses, Vanguard? Trading expenses - these are the same for VIG and its open end siblings, because they share the same underlying portfolio. Likewise any volatility due to skittish investors (again one must ask, Vanguard?) would impact the NAV of the ETF share the same as it would affect the open end class' NAVs.
This is why I feel Vanguard provides the perfect way to compare the two ways of buying/selling shares of a portfolio - ETFs and open end funds. Take the portfolio itself out of the equation and all that's left are the intrinsic differences in sales mechanisms. One always gives you a buck for a buck (NAV), the other often doesn't quite get there, for various reasons.

Here's a good thread on M* from someone asking a similar question - new investor, a bit younger (age 25, not 30), lots of the same funds (or similar funds, or funds from the same families).
http://discuss.morningstar.com/NewSocialize/forums/t/341193.aspx
It's worth reading because no one who responded suggested "pick this fund and this one". Rather, they ask additional questions of the investor, discuss IRAs, matching, costs, etc. Easier for me to point you there than repeat a lot of good feedback.
Unlike the funds there (which were 'A' shares, apparently load-waived), you are being offered 'R' shares, which are load shares, period. Those funds add an extra 0.50% annually to the fees they take out of your investment.
Often (especially for small employers) this is a way for the employer to offer the plan without paying any fees to the administrator for running it. It is the employees who pay for the plan out of their investments (the 0.50% being assessed). That's a good reason to invest in the plan only up to the matching amount (if any), then an IRA, then maybe looking at more in the plan.
Of the funds I recognize, there are some decent ones, but few that jump out at me.

I have less then $5,000. That is what I would have said if asked.
The rest of my $ is in mutual fund ect. or my home.
How do companies spend $ on such poor surveys.
http://www.gobankingrates.com/savings-account/62-percent-americans-under-1000-savings-survey-finds/

I suspect that huge, highly liquid and extremely cheap ETFs like most of Vanguard's or even some of Schwab's proprietary ones (say, SCHD) do not suffer from disadvantages 1,2, 4, and 5 listed above.
Indeed, if you compare the ETF and OEM versions of Vanguard funds (say VIG vs. VDAIX) the ETF generally outperforms slightly.
#3, poor market timing, is a danger for all investments.
And mutual funds have plenty of disadvantages too, including hidden fees, trading expenses, taxes, and being forced by skittish investors to buy and sell at exactly the wrong time.
But I'd stay far away from any ETFs that aren't very liquid and cheap.