Nationwide Financial reports growing interest in Roth 401(k) option
More than 2,600 plans offer Roth option to participants
FOR IMMEDIATE RELEASE
Feb. 22, 2007
Erica Lewis (614) 249-0184
Carah Brody (614) 677-0275
Columbus, Ohio—When the Roth 401(k) was introduced in January 2006, many wondered how quickly, or if at all, plan sponsors would offer the savings option to their plan participants. Just a little more than a year after its implementation, the Roth 401(k) is now a viable, permanentfixture in the retirement planning landscape. Nationwide Financial Services, Inc. (NYSE:NFS)has more than 6,400 participants in 2,600 plans taking advantage of its Roth 401(k) option in itssmall and micro retirement plans.
Momentum has grown as the year progressed. Since May, Nationwide’s Roth 401(k) assets have grown from $3 million to more than $18.5 million. During this time, the number of plans offering this option has risen 580 percent, from 382 to more than 2,600, indicating increased awareness among plan sponsors and participants of the benefits associated with a Roth 401(k).
“We have experienced a tremendous interest in Roth 401(k) participation since it became available last year,” said Bill Jackson, senior vice president of Retirement Plans for Nationwide Financial. “This is due in large part to the variety of educational resources we have created for investment professionals, plan sponsors and participants.”
To help consumers determine whether the Roth 401(k) option may be appropriate for them, Nationwide offers The Roth Retirement Plan Analyzer. This easy-to-use online tool provides a basic overview of the Roth 401(k) option and helps participants decide if it may be right for them. After providing some of their personal information, visitors can run “what if” scenarios to determine if they could potentially benefit from a Roth 401(k). Participants can also compare Roth 401(k) contributions to traditional 401(k) investments to find out if they are on track to reach their retirement savings goals.
Along with Nationwide’s educational efforts, the Pension Protection Act has also made a major impact on the growing popularity of the Roth 401(k) option. The Roth 401(k) was originally set to expire in 2010, but the Pension Protection Act makes it a permanent retirement planning option.
“After the Pension Protection Act was passed in August, the Roth 401(k) became much more attractive,” Jackson said. “Now that our plan sponsors know that the Roth 401(k) is permanent, they are more inclined to include it as part of their retirement planning program.”
To learn more about the Roth 401(k) option, visit the Roth Retirement Plan Analyzer under the tools section of the investments and retirement page at www.nationwide.com.
About the Roth 401(k)
The Roth 401(k) option provides participants the flexibility of saving for retirement with after-tax income, allowing them to make tax-free withdrawals once they’ve stopped working1. In 2007, individuals can contribute up to $15,500 to their 401(k) plan. Participants of plans who elect to add the Roth 401(k) option to their 401(k) plans can contribute up to a total of $15,500 between their pre-tax 401(k) and their after-tax Roth 401(k) contributions. The contribution limit is $20,500 for individuals age 50 and older.
Neither Nationwide® nor its representatives give legal or tax advice. Clients should be advised to consult an attorney or tax advisor for answers to specific tax questions.
About Nationwide Financial
Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers invest2 and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers.
It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. The group is led by Nationwide Mutual Insurance Company, which is ranked No. 98 on the Fortune 100 based on 2005 revenue3. For more information, visit www.nationwide.com.
The Nationwide Framemark is a federally registered service mark
of Nationwide Mutual Insurance Company.
1 Subject to the fulfillment of qualified withdrawal requirements
2 Nationwide Investment Services Corporation, member NASD. In MI only: Nationwide Investment Svcs. Corporation.
3 Fortune Magazine, April 2006