1. Defined Contribution Plans In A Post PPA Environment Employee Research Institute’s 62 nd Policy Forum May 8, 2008 David L. Wray President Profit Sharing/401k Council of America davidw@psca.org

2. 2 Impact of the 2006 Pension Protection Act PPA Set the Table Permanence Saver’s Credit Automatic Enrollment – Utilization – Plan Design – Investment The Flaws The Future

3. 3 Impact of the 2006 Pension Protection Act Automatic Enrollment Utilization 2007*33.3% 200623.6% 200516.9% 200410.5% 2003 8.4% 2002 7.4% 73.1% New Hires Only, 26.9% All Non-Participants

4. 4 Impact of the 2006 Pension Protection Act Design: Automatic Enrollment Deferral Percentage Year 1% 2% 3% 4% 5% 6% and up 200710.010.047.515.07.5 10.0 2006 4.214.358.5 8.56.1 8.5 2005 3.215.460.310.93.2 7.1 2004 2.319.855.810.55.8 5.8 2003 3.821.558.2 3.8 6.3 6.3 2002 3.124.655.412.3 0.0 4.6

5. 5 Impact of the 2006 Pension Protection Act Design: Automatic Enrollment With EE Contribution Escalation 200731.6%19.6% Voluntary 200631.2% 200514.8% 2004 8.5%

6. 6 Impact of the 2006 Pension Protection Act Automatic Enrollment Default Investment Year SV MMBalLife/ Other Target 2007 8.9 2.5 13.9 64.6 10.1 2006 19.2 6.4 14.6 53.4 6.4 2005 30.3 9.7 17.0 37.0 6.1 2004 26.9 23.7 29.0 8.6 11.9 2003 30.3 19.7 36.4 9.1 4.5 2002 31.5 25.9 22.2 14.8 5.6

7. 7 Impact of the 2006 Pension Protection Act The Flaws $1,000 Per Day Fine For Violating Notice Req. Safe Harbor Not attractive Enough The Future Very Bright For Medium And Large Companies (78% of 401(k) participants: 2005) Doubtful For Small Companies of 250 Or less 85% participation rate already