PSCA Applauds the PSCA Applauds the Passage of Legislation That Makes the Savings and Pension Provisions Enacted in the 2001 Tax Act (EGTRRA) Permanent

Subtitle of press release

WASHINGTON (August 7, 2006) -The Profit Sharing/401k Council of America (PSCA) is pleased that HR 4, The Pension Protection Act of 2006, which was passed by the Senate and sent to the President for his signature on August 3, includes provisions

• making permanent the retirement provisions of the 2001 Tax Act (EGTRRA);
• reauthorizing and indexing the Saver's Credit; and,
• removing barriers to automatic enrollment.

Companies will make more significant and long-term commitments to their defined contribution programs now that the rules governing them are more predictable. Plan sponsors will begin aggressively communicating to the approximately 10 million eligible lower-paid workers the benefits of the Saver's Credit now that it has been reauthorized and made permanent. Many more plan sponsors will automatically enroll their employees in their plans now that the barriers to such programs have been removed.

"With these changes tens of millions of additional American workers will join those currently participating in employer-provided defined contribution retirement programs," said PSCA President David Wray. "These new participants will accumulate trillions of dollars, which will help them enjoy the best retirement experience of any generation in history. Their retirement savings will be a vital source of retirement capital, helping fuel our economic growth."

The passage of these provisions brings closure to an effort begun at PSCA in 1992 to overhaul defined contribution plan regulation so the benefits of these employer-sponsored programs could be provided robustly to every American worker.

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The Profit Sharing/401(k) Council of America (PSCA), a national non-profit association of 1,200 companies and their 6 million employees, advocates increased retirement security through profit sharing, 401(k) and related defined contribution programs to federal policymakers and makes practical assistance with profit sharing and 401(k) plan design, administration, investment, compliance and communication available to its members. PSCA, established in 1947, is based on the principle that “defined contribution partnership in the workplace fits today’s reality.” PSCA's services are tailored to meet the needs of both large and small companies with members ranging in size from Fortune 100 firms to small, entrepreneurial businesses.