the new 401k roth legislation: this came from my CFP Roth 401k: This is exciting. Many people have not qualified for a Roth IRA due to their income. With a Roth 401k, there will be no income limitations. Meaning, everyone may defer $15,000 in 2006 in a Roth 401k (or regular 401k). Final requlations have not been released, but the Roth 401k is already part of the code. We may not have clarity until mid-2006. I will eventually recommend this to all existing 401k plans. Concerns: There will be a defiinte cost to add the Roth 401k to a current plan. I do not expect the cost to be prohibitive, but I doubt it will be free. I also have significant concerns about participant education. Many participants still have trouble understanding what 'pre-tax' means. Now, we'll need to explain pre-tax and tax-deferred for regular 401k plans. Then, we'll need to explain after-tax and tax-free for Roth 401ks. This will take more time, and may be confusing. Automatic Enrollment: This legislation is pending, but has an excellent chance of passing. Instead of just offering the 401k to employees, everyone will be automatically enrolled. We are still waiting for clarity on details. There will be an option for people to 'opt out' before they are automatically enrolled. This will reduce the administrative burden of people being automatically enrolled, then stopping contributions. Concerns: Automatic enrollment will create more adminstrative work. If employees are 'enrolled' before they remember to opt out, this will create numerous small 401k accounts, which will increase hard costs, in addition to more administrative work. For plans with low participation, this a potential liability. What if automatic enrollment doubles your participation? Increased match costs could become expensive for some companies. A lower match percentage (2.5% instead of 4%) may be enacted along with automatice enrollment. This may limit increased costs. As expected, I'll keep everyone posted on ramifications for your company and plan.