[INSERT DATE]



[INSERT DATE]

«Name»

«Title»

«CompanyName»

«CompanyAddress1»

«CompanyAddress2»

«CompanyCity», «CompanyState» «CompanyZip»

RE: «PlanLine1»

«PlanLine2»

New Roth Contributions to 401(k) Plans

Dear «Salutation»:

Effective 2006, the tax code has been changed to allow a new type of contribution to a 401(k) plan. This new type of contribution is known as a Roth Contribution and is very much like a contribution to a Roth IRA. That is to say the Roth Contribution is made on an after-tax basis, but if certain requirements are met, a distribution from the Roth Contribution account will not be taxed. The attached document describes the new Roth Contributions in more detail.

Before adding the Roth Contribution feature there are at least two issues to consider. The first issue is whether the Roth Contribution feature will be more beneficial to plan participants than traditional pre-tax 401(k) deferrals. In some situations, the immediate tax deduction is more beneficial than the Roth Contribution. We recommend that you discuss this issue with your tax advisor. The second issue involves the ability of your payroll service or recordkeeping platform to allow for Roth Contributions. You should discuss the payroll issues with your payroll service provider and we would be happy discuss the capabilities of your current recordkeeping platform. We anticipate that there will be an increase in the administration fees if the Roth Contribution feature is added.

Please let us know whether you would like to add the Roth Contribution feature to your 401(k) plan. You may do so by completing the appropriate box below and returning a copy of this letter to us using the enclosed envelope. If you would like to add the Roth Contribution feature to your plan, we will start preparing the necessary documents and participant election forms; one of which will be a plan amendment. Please note that there is a deadline for having the plan amendment signed and that this deadline is based on your plan's year end. We anticipate that our fee for the required documents will $_______.

Please indicate your selection:

[ ] Yes. I would like to add the Roth Contribution feature. Please start preparing the necessary documents.

[ ] No. I would not like to add the Roth Contribution feature at this time.

Please call us with any questions you may have.

Sincerely yours,

________________________

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