Hi Jack! I'm a fan of Roth 401(k) plans, so I can see why you would want to do this. You have already taken the first step in contacting your HR group. It sounds like your company retirement plan does not allow a conversion, so you have to abide by the plan rules. However, if your company does offer a Roth 401(k) type of plan in addition to a regular 401(k), you should be able to discontinue contributions to the regular plan and begin designating any new contributions to the Roth 401(k). While this does not impact the savings in your current account, you can make a change so that going forward, your contributions will grow tax-free and be tax-free upon withdrawal.
Jack, there are 2 points to consider. the first is if your employer offers a Roth, and the second is if they will allow a conversion.
I have trouble believing that your employer does not offer a Roth option. To this point, you should be able to easily direct future contributions to a separate Roth 401k account.
As to being able to convert your current traditional 401(k) account to a Roth; the HR person you spoke to may or may not be knowledgeable on this subject....he or she really may or may not have even understood what you are trying to do. I would direct that question to the plan administrator. Their contact info should be on your statement. If not, just call HR and ask for their phone number. The plan administrator is the one who would execute such a conversion.
You mentioned not paying more taxes. Keep in mind that if you participate in a Roth, the monies going in will be taxed as ordinary income, regardless of whether it is new contributions or a conversion.. And you mentioned early withdrawal or distribution fees. You should not see any, except, as you mentioned a possible custodian maintenance fee.
IRS laws now allow you to do a Roth conversion from a 401K to a Roth 401K, but only if your plan has a Roth 401K option AND allows you to do the conversion. Current statistics show that more than half of all plans will NOT allow you to convert. You will need to check with you HR department or the plan provider. I like the Roth IRA even for people in their peak earning years. Considering the fiscal condition of the government, I think there's a high probability that most people's tax rates will be same or higher in retirement. Also, I think traditional iRAs are a better deal for the IRS than for the individual. I would rather forgo a tax deduction on $2,000 today in exchange for the ability to receive $2,000 or $3,000 tomorrow tax-free. But, I would still consult with your CPA and financial advisor before doing a conversion. They may know if reason why you would be better off not converting.