PSCA URGES EMPLOYERS TO USE 401(k) DAY TO COMMUNICATE THE SAVER'S CREDIT

CHICAGO (August 29, 2006) - The Profit Sharing/401k Council of America (PSCA) urges employers to use 401(k) Day to communicate the benefits of the Saver's Credit to their employees eligible for 401(k) participation. National 401(k) Day is an annual celebration that encourages employers to set aside time at the workplace to spotlight the importance of their employer-sponsored profit sharing and 401(k) plans. PSCA offers materials to employers at no cost to help them stage a celebration at the worksite.

One of the more overlooked provisions of the 2001 Tax Act (EGTRRA) was the Saver's Credit. This tax credit of up to $1,000 a year for low-income and moderate-income savers was virtually ignored by 401(k) sponsors and providers because it was temporary and was scheduled to terminate this year. As a result many of the 10 million workers eligible for the credit did not take advantage of it. More importantly, the boost in 401(k) participation was not as great as it could have been.

"Now that the Saver's Credit has been made permanent it is time for companies to explain this valuable benefit of 401(k) savings to their lower-paid workers, and 401(k) Day is a great opportunity to do it," said David Wray, President of PSCA. "Not only do workers with an adjusted gross income of between $15,000 and $25,000 get the tax deduction and the employer match when they save in their 401(k), they can get up to $1,000 off of their income tax bill." Going forward, the Saver's Credit will emerge as a significant recruiting tool of lower-income workers, a group it has been particularly hard to engage in 401(k) saving in the past.

To learn more about the Saver's Credit go to www.401kday.org.

Free Materials for 401(k) Day
On September 8, 2006, National 401(k) Day, PSCA will remind workers that saving in their employer-sponsored retirement plan now will make it possible to trade work for the retirement they want and deserve. "Our theme this year is Trading Places, because there is life after work. Saving now in their employer-sponsored 401(k) can help workers trade work for the retirement life they want," said Wray. "Our Web site shows photos transitioning from younger worker to retiree; trading a job for an active retirement lifestyle. We want to empower employees to create the retirement of their dreams by saving now. They can't have too many reminders about the importance of saving for their future."

PSCA offers tools and step-by-step instructions to help plan sponsors with their 401(k) Day preparations and customize the turnkey materials available on the Web site. The materials include free interactive and print 401(k) participant education tools, such as posters, payroll stuffers, interactive online word games, and an entertaining financial quiz that educates employees about 401(k) terms and investing. PSCA member companies also can access four new Web casts tied to the Trading Places theme. Geared toward participants, the Web casts demonstrate the importance of starting to save early, how easy it is to contribute to a 401(k) plan, the tax advantages of saving in a 410(k), and more. In addition, communication materials in Spanish are available for PSCA member companies.

Employers can learn more about 401(k) Day on PSCA's special 401(k) Day Web site, http://www.401kday.org. Visit this Web site for easy, direct access to all of the 401(k) Day materials. "While we've earmarked September 8 as a national day of celebration, it's never too late to celebrate employer-sponsored retirement plans," Wray said. "We encourage plan sponsors to pick a date that works best for their organization."

National 401(k) Day is supported by the nation's leading retirement plan providers and is sponsored in part by: ADP Retirement Services, Charles Schwab, FedEx Kinko's, Fidelity Investments, John Hancock Retirement Plan Services, MassMutual Financial Group, MFS Retirement Plan Services, Inc., Morgan Stanley, Principal Financial Group, and T. Rowe Price Associates, Inc.

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.