PSCA RELEASES INVESTMENT ADVICE SURVEY

Data Reveals Fiduciary Concerns By Employers

CHICAGO (January 9, 2002) - The Profit Sharing/401(k) Council of America (PSCA) is pleased to announce the release of its 2001 Investment Advice Survey. PSCA has collected data on the investment advice practices of 141 member companies. This information includes the percentage of companies currently offering advice and an identification of issues that potentially deter employers from making advice available.

The 2001 Investment Advice Survey found that 22 percent of respondents provide investment advice. Of those who do not, the most prevalent reason cited was 'fiduciary concern about liability for advice that results in a loss, even if the advisor is competent and there is no conflict' (93.1 percent). Nearly all of these respondents also expressed concerns about selecting a competent advisor and mon itoring that advisor under the ERISA 'prudent man' standard. "The survey confirms what we have been hearing anecdotally," says Edward Ferrigno, Vice President of the Profit Sharing/401(k) Council of America. "Fiduciary concerns are the number one reason preventing sponsors from offering advice."

However, one fiduciary concern may be unwarranted. The Department of Labor has previously indicated that it will not hold plan sponsors responsible in cases when advice results in a loss, as long as the designation and periodic review of the advice provider are conducted in accordance with ERISA fiduciary guidelines. Ferrigno noted that HR 2269, Representative John Boehner's advice bill approved by the House of Representatives in November 2001, contains specific language to that effect. "Nevertheless," Ferrigno added, "it is clear that we have a way to go before the majority of plan sponsors are comfortable with providing advice."

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.