PSCA APPLAUDS REPRESENTATIVES’ LETTER TO IRS ON BEHALF OF TRIBAL GOVERNMENT RETIREMENT PLANS

WASHINGTON (September 15, 2004) - The Profit Sharing / 401k Council of America (PSCA) commends Representatives J.D. Hayworth of Arizona and Dale Kildee of Michigan for their leadership in preparing a September 13 letter to the Internal Revenue Service requesting a regulatory moratorium on any adverse actions towards retirement plans sponsored by Indian tribal governments based on their being structured as governmental plans. The IRS took a "no ruling" position in January that differs from their past practice of granting these plans governmental plan status. Representatives Hayworth and Kildee are also cosponsors of HR 3605, the Governmental Pension Plan Equalization Act of 2003, that clarifies that Indian tribal governments can sponsor governmental pension and welfare plans. Plans structured as governmental plans are exempted from some provisions in the tax code and ERISA in recognition of the special needs and circumstances for governmental plans. This treatment is routinely granted to state and local governments.

Twenty-three other Representatives joined the co-chairman of the House Native American Caucus. The signatories include six members of the Ways and Means Committee that oversees the IRS and employer provided retirement plan tax issues.

"We are perplexed by the IRS’ position given the government-to-government relationship that generally exists when dealing with Indian tribal governments," said PSCA President David Wray. "The situation is even more confusing given Executive Order 13175 which requires regulators to "grant Indian tribal governments the maximum administrative discretion possible" and to consult with tribes before promulgating regulations with tribal implications."

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.