PASSAGE OF THE PENSION PROTECTION ACT OF 2005 IS A MAJOR STEP FORWARD FOR EMPLOYER PROVIDED DEFINED CONTRIBUTION PLANS

WASHINGTON (December 15, 2005) - The Profit Sharing / 401(k) Council of America (PSCA) commends chairmen Bill Thomas and John Boehner for their leadership and thanks all the Representatives who voted in favor of HR 2830, the Pension Protection Act of 2005.

HR 2830 includes many important provisions that will assist the one million employers who provide a defined contribution retirement plan to over sixty million workers and encourage more employers to offer a retirement plan to their workers. The legislation makes permanent the important retirement plan improvements in the Economic Growth and Tax Relief and Reconciliation Act of 2001. The provisions are currently scheduled to expire at the end of 2010 or earlier. HR 2830 provides incentives and removes barriers for employers that automatically enroll their employees in a 401(k)-type plan unless the employee affirmatively opts to not participate. It provides another alternative for employers to provide advice to plan participants. These provisions, and others, will result in new savings by even more American workers. HR 2830 contains no provisions that are counterproductive to the defined contribution plan system.

“It is hard to overstate the importance of making the EGTRRA pension provisions permanent,” said PSCA President David Wray. “Moving into a regime of lapsed rules and intermittent short term extensions will be catastrophic for the employer provided retirement system. PSCA will devote all its resources to ensuring that the conference agreement with the Senate retains this key provision.”

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.