The Profit Sharing/401k Council of America had much to celebrate in 2007. On top of having a successful year, 2007 was PSCA’s 60th anniversary! PSCA is proud to celebrate 60 years as the voice of the plan sponsor. 2007 was significant for PSCA because we provided defined contribution plan sponsors with new levels of support and worked successfully in Washington maintain — and even improve — the regulatory structure governing employer-sponsored retirement plans.

Government Affairs
2007 was the year of the 401(k) fee. Introduced legislation, final and proposed regulations, and numerous media interviews later, it is clear the public policy and media attention to 401(k) fees reached a new level in 2007.

In 2007, PSCA had three 401(k) fee-related public policy goals. The first goal was to channel new fee disclosure requirements through the regulatory — and not the legislative — process. Fee disclosure and transparency present complex issues. Amending ERISA through legislation to prescribe specific fee disclosure will lock in disclosure standards built around today’s practices. We believe that the regulatory approach of soliciting input and issuing proposed and final rules based on comments from all affected parties will result in carefully-structured rules that will avoid unintended consequences. Moreover, regulatory guidance is dynamic. It can be more readily clarified and amended to adapt to changing conditions. It is now unlikely that fee-related legislation will be enacted until after all of the current Department of Labor (DOL) regulatory fee initiatives are completed.

The second goal was to ensure that policymakers understand why fees disclosed to participants should help them. Plan sponsors and plan participants have markedly different disclosure needs and overly-detailed and voluminous information to participants may impair rather than enhance a participant’s decision-making. Participants need to know about investment fees and other costs associated with the plan so they can make appropriate investment allocation decisions or decide whether to use plan features like the plan loan provision. It is up to the plan sponsor to ensure that plan-paid fees are reasonable. PSCA believes that most policymakers now understand that bombarding participants with detailed fee breakdowns including such items as sub-account transfer credits and revenue sharing will add nothing of value to participant decision-making. In fact, such a requirement would likely reduce participation as employees will be even more intimidated by what is already an intimidating process.

The final goal was that new regulations not result in a higher fee-reasonableness fiduciary standard for employers, especially small employers, by requiring that they analyze separately the cost of each component part of the plan. Many plan administrators prefer reviewing costs in an aggregate manner and, as long as they are fully informed of the services being provided, they can compare and evaluate whether the overall fees are reasonable without being required to analyze each fee on an itemized basis.

At the Ways and Means Committee hearing, PSCA President David Wray was asked by Representative Sam Johnson (R-TX) if investors in a 401(k) plan pay more or less in fees than retail investors. He replied that most pay less, as about two-thirds of participants work at large companies that are able to negotiate favorable fee arrangements. Representative Johnson followed up asking that if so are additional fee disclosure requirements necessary. Wray responded yes, and added, “We feel the credibility of the system requires that all of the players see what the fees are even though I think the system is providing a very favorable fee outcome.”

Member Services
Toll-Free Helpline
PSCA’s Toll-Free Helpline for members only is a significant membership benefit. PSCA members save time and money by bringing their defined contribution plan questions to the expert staff leadership. In 2007, PSCA assisted more than 1,000 members with their requests.

Benchmarking
2007 marked the 50th publication of PSCA’s Annual Survey of Profit Sharing and 401(k) Plans. PSCA’s latest Annual Survey contains 114 tables — the most ever — of data on topics including plan participation, Roth 401(k), investment options, automatic enrollment, plan administration, and more. The 2007 Annual Survey reports data on the 2006 plan year experience of 1,000 companies with more than six million participants and $600 billion in plan assets.

In 2007, PSCA enhanced member benchmarking support and introduced the Defined Contribution Plan Comparative Analysis. PSCA member companies that complete the Annual Survey questionnaire receive a customized report that benchmarks their plan data against data from this year’s annual survey. This free customized benchmarking report contains analysis not available in the published results. This report is especially beneficial to plan sponsors in light of recent and ongoing legislative and regulatory changes and the increased scrutiny defined contribution plan sponsors are experiencing.

PSCA also conducted several mini-surveys based on topics of interest requested by PSCA members. Topics of these surveys included Roth 401(k) and PSCA’s annual enrollment eligibility survey.

PSCA Executive Report
PSCA members received monthly updates about the latest legislative events in Washington, D.C. through the Executive Report. This monthly electronic communication keeps our members on top of legal and legislative news affecting profit sharing and 401(k) plans.

Bimonthly Magazine
PSCA is pleased to announce that we received the 2007 Gold Circle Award from ASAE and the CAL for our bimonthly membership publication, Defined Contribution Insights. PSCA would like to thank its members for their outstanding contributions to the magazine. Their articles offering expert advice help readers stay on top of the latest news and trends affecting their defined contribution plans. Defined Contribution Insights continues to feature timely articles on plan administration, communication, the latest survey data and trends, and recent regulatory news.

401(k) Day
401(k) Day is a nationally-recognized day that raises awareness about the benefits of 401(k) programs. PSCA’s 2007 401(k) Day campaign was our most comprehensive communication and education program yet! In 2007, PSCA created a full set of seasonal communication tools that can be used year-round to continuously promote the benefits of employer-sponsored defined contribution plans. The campaign’s theme was based on the seasons of the year, and each season focused on a particular aspect of saving in a 401(k) plan.

A record number of 22,462 users accessed this complete library of education and communication materials on PSCA’s special 401(k) Day Web site, www.401kday.org. These postcards, posters, interactive tools, and Web casts were used by thousands of companies to host 401(k) Day at their own companies to encourage their employees to participate in their 401(k) plan.

Web Sites
PSCA hosts three Web sites which are: www.psca.org, www.401k.org, and www.401kday.org. These sites contain hundreds of pages of information about PSCA and profit sharing and 401(k) plans. PSCA members can access special members-only sections where they can find the latest news, data, and publications about defined contribution plans.

Use of all three of PSCA’s Web sites increased in 2007. The site www.psca.org received 369,776 visits; www.401k.org received 161,153 visits; and the site www.401kday.org received 22,462 visits.

Conferences
PSCA hosted three successful conferences in 2007: The Midwest Regional Conference, The Washington DC Public Policy Fly-In, and the 60th Annual National Conference and Exhibition at the Westin Mission Hills Resort and Spa in Rancho Mirage, California. Leading defined contribution experts shared their knowledge with PSCA members and conference attendees on a variety of topics including benchmarking, fiduciary responsibility, plan communications, and tools and ideas plan sponsors can use at their own companies. PSCA also celebrated 60 years of success with special presentations at the National Conference.

PSCA conference attendees rated all three conferences 4.6 out of 5.0. PSCA remains committed to making our conferences the premier benefits events of the year.

Signature Awards
PSCA received 325 Signature Award entries for the 2007 competition, which was our largest group of submissions yet! Additionally, two new categories were added: Retirement Readiness and Train-the-Trainer/Advocacy Programs. PSCA Signature Awards honor excellence in plans that demonstrate outstanding education and communication programs to promote the benefits of saving in a 401(k) plan to their employees.

PSCA announced the winners of this year’s Signature Awards at a special ceremony at the 60th Annual National Conference on September 25, 2007. This year, two companies received the prestigious Best of Show Award: M.A. Mortenson Company, sponsored by Wells Fargo Institutional Trust Services and The Richfield Companies, LLC; and AAA Cooper Transportation, sponsored by Charles Schwab. These companies, and the winners in the other categories, were highlighted in the annual Signature Awards Magazine. This publication demonstrates proven best practices techniques that PSCA members can implement at their own companies. PSCA members and attendees of the National Conference received a copy of Signature Awards Magazine.

Also contributing to the success of the 2007 Signature Awards was the outstanding team of volunteer judges who donated their time and expertise to evaluate and judge this year’s entries. Many of these volunteers also wrote descriptions of the winners for Signature Awards Magazine.

Public Education and Media
PSCA strives to maintain a strong presence in the media in order to promote the spread of complete, accurate, and balanced information about employer-sponsored defined contribution plans. Each year, PSCA representatives spend countless hours speaking with reporters, writers, and other members of the media to actively promote the benefits of profit sharing and 401(k) plans. To generate as much media coverage as possible, PSCA provides an average of at least three interviews a day to media outlets on the local, state, and national level. PSCA is quoted somewhere in the media at least once a day. Some of the media outlets that PSCA is quoted in are: The Wall Street Journal, New York Times, USA Today, L.A. Times, Chicago Tribune, NBC, CNBC, MSNBC, and CNN.

Media appearances by PSCA are important because they ensure that participant appreciation is not undermined by negative media, which generates needless participant inquiries to your call centers and plan administrators. PSCA was mentioned in the media 595 times in 2007.

Administration
PSCA managed its resources in a financially responsible manner in 2007. PSCA’s total income in 2007 was $2,240,000. PSCA’s total expenses were $2,170,000.

Volunteer Leadership
PSCA credits much of its success to the support and dedication of our volunteers. In 2007, many PSCA members shared their time and expertise by contributing to the Board of Directors or one of our many committees: Education and Communication, Legal and Legislative, Provider Advisory, Research, and National Conference Planning.

PSCA would like to say a special thank you to its member volunteers. Your support is critical to our success and our ability to continue to provide quality services and benefits to the members of PSCA.

Conclusion
In 2007, PSCA celebrated 60 years as a place where plan sponsors can network to share best practices and as the voice of the defined contribution plan sponsor in Washington. As we move forward, PSCA remains committed to expanding our membership and providing important benefits and regulatory updates to our members. With the support of our dedicated volunteers and committed staff, PSCA will continue to support a public and regulatory environment that is conducive to employer-sponsored defined contribution plans.