PSCA URGES THE SEC TO RECONSIDER THE RULE ON REDEMPTION FEES

WASHINGTON (April 24, 2006) -The Profit Sharing/401(k) Council of America urges the Securities and Exchange Commission (SEC) to reconsider the Commission’s March 7, 2006, proposed amendments to the final rule on redemption fees that was adopted on March 11, 2005. “The final rule and the proposed amendments will impose cost, complexity, and compliance issues that are, in the final analysis, detrimental to the employer-provided retirement plan system,” PSCA President David Wray said.

PSCA had previously commented on this issue suggesting proposed rules on redemption fees were premature because the Commission had failed to reinvigorate and enforce an effective fair value pricing requirement. PSCA also argued that a redemption fee rule should permit funds, intermediaries, and retirement plan sponsors to work collaboratively on alternative measures to address any market timing problems. Finally, PSCA asked the Commission to conduct a cost-benefit analysis before issuing a final rule. Neither the final rule nor the proposed amendments has addressed these concerns.

Full Text of the Letter

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.