Fidelity Offers a Web-based Calculator to Help Owners Assess Total Plan Costs

BOSTON, September 13, 2006 - A new Fidelity survey indicates that 43% of small businesses¹ with fewer than 20 employees perceive cost as a major barrier in offering a 401(k) plan to workers. Fiduciary responsibilities (26%) and perceived complexity of plan administration (26%) were also cited as major challenges in implementing a plan. In addition, one out of four business owners believe there is a lack of availability of 401(k) plans to suit their company's small size.

"This is a case where perception is not reality, because small businesses of any size can get a 401(k) plan today that is cost-effective and easy to implement and administer," said Edmund F. Murphy, executive vice president, Fidelity Institutional Retirement Services Company, the nation's largest provider of 401(k) plans. "With the responsibility to save for retirement increasingly being placed on the shoulders of the individual, we want to encourage every small business owner to take the necessary steps today to secure their future, and those of their workers, by offering a workplace savings plan."

The Fidelity survey polled 1,000 small business owners and decision-makers at companies with 5 to 20 employees that currently do not offer a 401(k) plan. Industry experts believe more than 13.6 million employees² in small, micro-businesses do not have access to an employer-sponsored 401(k) plan today.

Two-thirds (62%) of the small business owners surveyed by Fidelity said they are not confident in their overall knowledge of 401(k) plans, yet believe there are clear barriers preventing them from implementing one for their company. Given that cost is perceived to be a major barrier for many small businesses, Fidelity has developed a tool to enable small business owners to assess the real costs involved in offering a 401(k) plan. Fidelity's Total Plan Cost Calculator is a Web-based tool that looks at plan fees, plan assets, and long-term growth scenarios. It produces graphs that illustrate total plan costs over several years and can also make comparisons between Fidelity's offerings and other plan providers. Small business owners can then understand the total cost over time of a retirement plan designed to meet their specific needs.

Most Small Businesses Realize the Benefits of Offering a Plan

The top two greatest perceived benefits of 401(k) plans among small business owners were that they could save more for their own retirement (66%) and help employees save for their retirement (59%). Almost half (44%) of small businesses without a 401(k) plan said the ability to offer competitive benefits to attract and retain employees would be a major reason to offer a 401(k) plan. Not surprisingly, in a separate study conducted this year by Fidelity³ on small businesses that do provide a workplace plan, more than half (59%) cited a 401(k) plan as beneficial in employee recruitment and retention.

But Many Don't Realize a Plan is Available for Them

One out of four (26%) small business owners surveyed believed there is a lack of 401(k) plans to suit their company's small size. Fidelity has been servicing the small business market for over 15 years and provides 401(k) plans to fit any size company. -more- Fidelity offers e401(k), a retirement plan solution that small business owners with 10 to 150 employees can use for plan set-up and administration. Participants have access to a suite of Fidelity funds from which to choose, access to Fidelity's NetBenefits^® Web site which enables participants to make fund selections and changes online, and contact with licensed phone representatives via a 1-800 number.

"Our goal is to ease the administrative and fiduciary responsibilities on already time-constrained small businesses, so they can focus their resources on growing their company and not on 401(k) plan management," stressed Murphy.

Last month, Congress passed the Pension Protection Act of 2006. This new law provides additional benefits for small business owners to offer a 401(k) plan by providing permanence to larger annual contribution limits for small business retirement plans and offering special tax credits for certain qualified businesses.

Fidelity established its Emerging Corporate Market (ECM) unit in 1991 to focus specifically on the needs of small to mid-sized businesses. Since then, ECM, which is a division of Fidelity Institutional Retirement Services Company, has become a leading provider of plans to this market space, currently providing defined contribution retirement plan services to more than 10,000 emerging firms with approximately 1.6 million participants and assets of $64.4 billion as of August 31, 2006.

¹ ECM Small Business Retirement Solutions Study (April 2006).

³ECM DC Conversion Study (June 2006).

²Source: Congressional Research Service, Pension Sponsorship and Participation: Summary of Recent Trends (August 31, 2006).

###

About the Survey
Key findings are based on 1,003 online survey responses from employee benefits decision-makers at small businesses with between 5 and 20 employees that do not currently offer a 401(k) plan. The study was conducted for Fidelity by Northstar Research Partners (USA) from April 16 - April 18, 2006. The margin of error for the study is +/- 3% at the 95% confidence level.

About Fidelity Employer Services Company
Fidelity Employer Services Company provides benefits and human resources administration, talent planning, payroll solutions and stock plan services to millions of employees in the U.S.

About Fidelity Investments
Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of more than $2.7 trillion, including managed assets of $1.3 trillion as of August 31, 2006. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to more than 22 million individuals and institutions as well as through 5,500 financial intermediary firms. 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.

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.

Fidelity Investments Institutional Services Company, Inc.,
82 Devonshire Street, Boston, MA 02109