Workers offered Roth 401(k)s — slowly - February 26, 2006

[roth401k]

Workers offered Roth 401(k)s — slowly

By Kathy Chu, USA TODAY
Posted 2/26/2006

General Motors, Delphi, Vanguard and A.G. Edwards are among the first major employers this year to begin rolling out Roth 401(k) plans, which let workers withdraw money tax-free in retirement.
Congress allowed employers to offer Roth 401(k) programs starting in January.

Companies so far are slow to adopt such plans, mostly out of fear of confusing employees with another retirement-savings option, says Michael Weddell of Watson Wyatt, a consulting firm.

But given GM's stature, its move could have a ripple effect. "Clearly, if any large, well-recognized firm offers a Roth 401(k), companies would take notice," says Robert Liberto of Segal Advisors.

In late 2005, 34% of 223 large employers surveyed said they were likely to add a Roth 401(k) feature to their retirement plan this year, according to Hewitt Associates. A much smaller percentage have actually done so, says Hewitt's Lori Lucas. For some employers, Lucas says, administrative costs are a concern, too.

Roth 401(k)s can be especially..........

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