Some Reasons to be Thankful

As we reflect on the holiday season and the New Year, it is important to be thankful – thankful for our families and friends and thankful for our profit sharing/401(k) plans. Without employer-sponsored defined contribution plans, the market correction of 2008-2009 would have been more severe. Because of DC plans, trillions of dollars stayed in the market and billions more were invested in 2009, cushioning the downturn and helping support the current market rally. By the way, if we ever needed evidence supporting the validity of dollar cost averaging this year has supplied it.

I am also thankful for our earlier success in achieving permanence for the 2001 Tax Act retirement provisions. Without this, beginning in 2011 plan sponsors and providers would be facing perpetual uncertainty and one-year extensions, often retroactively enacted, of key pension provisions. Beginning in 2010 and in every year thereafter PSCA would have been forced into negotiating with Congress to get important defined contribution provisions extended. This would have distracted us and used valuable resources which we will now be able to direct to our effort to make the system better. Collectively, this will save us millions of dollars and significant aggravation for years to come.

In 2010 PSCA will also continue to work with the media to provide factual and fair coverage of employer-sponsored defined contribution plans. In printed articles and television interviews, we will strive to educate the public on the true benefits of the 401(k) system and defend our system from unwarranted stories that misrepresent the facts.

As we have recently experienced, it is hard to predict the future. However, one thing is certain. No matter what happens, we can be thankful that the employer-sponsored defined contribution system will continue to be there assisting American workers to build personal wealth that will help make their retirement dreams come true.

David