Roth 401(k) Plan Amendment Update
Rev. 10/13/05, E-mail Alert 2005-20

Richard Hochman, President of McKay Hochman, has prepared a special message to address the Roth 401(k) plan amendment issue.

A special update message from Rich Hochman…

As the beginning of 2006 draws near, we are receiving many inquiries from our clients about Roth 401(k) amendments. As we announced earlier, we are still waiting for some guidance from the IRS. I continue to lecture that we don’t believe that amendments will be required until the end of 2006 at the earliest. MHC, like many of our competitors, is working through various channels to discuss this important issue with the proper representatives at the IRS. Obviously, the amendment process is being held up by the release of the Final Regulations, which themselves have been delayed. At this time, I have been advised of the scheduling of at least one meeting between industry representatives and the IRS, where the amendment issue will be a key discussion point. This is a key concern for all document providers and we are working industry wide to try to get the amendment issue resolved.

Though some of our competitors are feeling the need, and may succumb to the pressure to issue their own amendments before the IRS does, at MHC, we have decided to wait until we meet face-to-face with the IRS. If we were to proceed with our amendments prior to the IRS issuing theirs, it is possible that you and your clients will be put through not one, but at least two amendments to incorporate Roth features. We are trying to avoid what could become a very time-consuming and confusing process. We will keep you posted as to the correct amendment process as we learn more.

We appreciate your patience in the meantime.