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The Profit Sharing / 401(k) Council of America (PSCA) commends Senators Rick Santorum and Robert F. Bennett for introducing S 1819, the 401(k) Enhancement Act: Encouraging Retirement Savings. The legislation is a major addition to PSCA supported bills that will assist employers in implementing retirement plans that automatically enroll new employees in a 401(k) plan unless they affirmatively opt out of the plan. This feature has a long track record of dramatically increasing savings retirement plan participation by low and moderate income workers. Senators Bennett and Santorum join other Senators who have introduced PSCA supported bills that remove several impediments under ERISA that reduce the willingness of employer to offer automatic enrollment plans or to invest automatically enrolled participants in a balanced investment. All the bills also offer an incentive, in the form of a nondiscrimination and top-heavy safe harbor, to encourage employers to offer the new automatic savings rate increase feature to their automatic enrollment plans. The safe harbor will help offset the high costs, including the employer matching contribution, that result from the implementation of this exciting new plan design. The Santorum-Bennett bill provides the best safe harbor and will result in the most new savers. ?It?s not complicated? stated PSCA President David L. Wray, ?the better the Congressional safe harbor, the more willing plan sponsors are to introduce these costly plans.? ?S 1819 sends a strong message that Congress is willing to partner with plan sponsors to provide incentives to offer this revolutionary plan design feature that has demonstrated a spectacular ability to create new savings by low and moderate income savers.?
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