BOSTON, January 13, 2005 - Fidelity Investments today reported an emerging trend towards automating workplace retirement savings, such as 401(k) plans, as increasing numbers of American employers seek to help employees overcome barriers to retirement saving by adopting lifecycle funds, annual increase and automatic enrollment programs, and discretionary investment management services. Some employees cite lack of time, money or investment knowledge as barriers to participation in their workplace retirement saving plan.

In analysis of the 12,806 employer-sponsored retirement plans it administers, representing nearly 11 million participants, Fidelity found that life cycle funds were the most rapidly adopted automatic plan feature during 2004, with approximately 1,200 employers adding Fidelity's lifecycle funds over the last 12 months. Also rapidly gaining traction was Fidelity's Annual Increase Program (AIP), which 287 plan sponsors added during 2004. These and automatic enrollment and discretionary investment management services are expected to attract continued interest during 2005 as both employers and participants recognize the need to improve retirement readiness by boosting workplace retirement plan savings.

Workplace Retirement Solutions Participant Benefits Freedom Funds Provides age-appropriate, diversified, retirement investing. Annual Increase Program Facilitates saving for retirement by automatically increasing workplace retirement savings account contributions. Automatic Enrollment Program Facilitates saving for retirement by automatically enrolling participants in their workplace retirement savings plan. Is often combined with Freedom Funds as the plan's default investment option. Retirement Plan Manager Provides professional management of retirement plan accounts.

"We are beginning to see significant attention focused on newer service offerings such as Fidelity's annual increase, automatic enrollment and discretionary investment management programs," said Bill Carey, president, Fidelity Institutional Retirement Services Company, the nation's largest provider of 401(k) plans. "Employees who are pressed for time, or lack confidence in their ability to develop the right asset allocation, are increasingly gravitating towards automatic retirement products and services that take much of the guess work out of investing for retirement."

According to Carey, demand for Fidelity's family of life cycle funds, the Freedom Funds, nearly doubled between 2000 and 2003, with 75 percent of plans now offering at least one Freedom Fund, and six percent, or 632 plans, selecting Freedom Funds as their default investment option. Offered in five-year increments, ranging from Fidelity Freedom Fund 2005 to Fidelity Freedom Fund 2040, life cycle funds offer age-appropriate asset allocation, and are increasingly popular with individuals searching for an effective one-stop retirement investment vehicle. The funds are designed to automatically rebalance and allocate their assets more conservatively as they approach their target date.

"One in four of our plan participants hold just one investment option, which usually does not provide them a proper balance between risk management and growth potential," said Carey. "Freedom Funds help solve that problem by providing age-appropriate asset allocation within a single investment."

Like Freedom Funds, both employers and employees are rapidly adopting Fidelity's Annual Increase Program (AIP). Since its introduction in June 2004, approximately 300 plan sponsors have added the service, and more than 1,800 plan participants have elected to increase their annual deferral, resulting in an average increase of 1.7 percent.

Designed to help participants save more for retirement, AIP automatically increases paycheck deferrals by a pre-determined percentage on an annual basis. AIP is particularly effective in helping employees keep pace with savings as their salaries grow, while overcoming barriers such as lack of time, procrastination and inertia. In fact, according to a phone poll of 200 participants conducted by Fidelity in July 2004, three-quarters strongly agreed that using automatic payroll deductions helped them stay on track with their retirement savings goals.¹ Increasing retirement savings contributions, even by a small amount, can significantly impact a participant's final account balance at retirement.

For employers striving to increase plan participation, particularly among newly eligible employees, Fidelity offers automatic plan enrollment, which is currently implemented by approximately 100 plan sponsors. Companies using this feature automatically deduct a minimum retirement savings deferral from employees' paychecks unless employees opt out. Deferrals are then invested in the plan's default investment option, often an age-appropriate Freedom Fund, while still providing employees with the ability to adjust their deferral rate or asset allocation after enrollment.

Also rapidly gaining traction are discretionary investment management services such as Fidelity's Retirement Plan Manager (RPM). With this service, which was introduced in 2003 and currently manages more than $250 million in retirement assets, participants delegate the management of their workplace retirement savings accounts to professional investment managers. Using participant data about time horizon, risk tolerance and financial situation, gathered using an Investor Profile Questionnaire, professionals will invest participants' retirement plan savings in a model portfolio of investments available within their retirement plans and make adjustments over time to address changes in market or economic conditions as well as changes to their personal finance situation.

Driven by concerns about employee retirement readiness, RPM is seen as a real value by plan sponsors, while generally attracting participants who want more assistance with managing and rebalancing their investments on an ongoing basis.

"Three key components of retirement readiness are participating in workplace retirement savings plans, maximizing salary deferral rates and maintaining proper asset allocation," said Carey. "Unfortunately, many American workers may feel either unprepared or uncomfortable about making these critical decisions, which could potentially prevent them from realizing their full retirement earnings potential. It is the need to service these retirement investors that is driving the current trend towards automatic solutions."

About Fidelity Employer Services Company

Fidelity Employer Services Company provides benefits and human resources administration, workforce effectiveness, payroll solutions and stock plan services to over 18 million employees in the U.S. as of November 30, 2004.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $2.0 trillion, including managed assets of $1.1 trillion as of November 30, 2004. Fidelity offers investment management, retirement planning, brokerage, human resources and benefits outsourcing services to 19 million individuals and institutions as well as through 5,500 financial intermediaries. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm. For more information about Fidelity Investments, visit www.Fidelity.com.

It is your responsibility to select and monitor your investments to make sure they continue to reflect your financial situation, risk tolerance, and time horizon. Most investment professionals suggest that you reexamine your investment strategy at least annually or when your situation changes. In addition, you may want to consult investment advisers regarding your specific situation.

Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges and expenses. For this and other information, call or write Fidelity for a free prospectus. Read it carefully before you invest.

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Fidelity Investments Institutional Services Company, Inc.,

82 Devonshire Street, Boston, MA 02109

¹ Based on a phone poll of 200 plan participants conducted by Fidelity Institutional Retirement Services Company (FIRSCo) between July 23 and August 3, 2004.