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					TRANSAMERICA®. The retirement answer.



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                       Understanding the Roth 401(k) Feature.
                    Employers can now choose to offer the new Roth 401(k) plan feature, which will allow
                    employees to voluntarily contribute after-tax dollars to their company’s existing 401(k) plan.
                    Because employees make after-tax contributions to their Roth 401(k) accounts, qualified
distributions from the Roth 401(k) accounts during retirement are not includible as income for federal tax
purposes—a key benefit that is new to 401(k) plans.

With the Roth 401(k) option, employees’ after-tax contributions can be made regardless of their income level
and are fully vested. Adding the new Roth 401(k) option will require additional recordkeeping, payroll system
changes, and will create changes in the enrollment and distribution processes.


                                         TRADITIONAL 401(k)                                     ROTH 401(k)
Employee Contributions           Before-tax                                  After-tax
Employee Taxes                   Reduces current income tax. Pay taxes       Pay current income tax.
                                 later, upon distribution.                   Tax-free distributions in retirement.
Employee Distributions           Federally taxed as income.                  Free from federal taxes if a qualified distribution.
Qualified Distributions (that    Distributions can be made after             Qualified Distributions can be made after Participant:
are NOT subject to               Participant:                                   Attains age 59 1⁄2
additional 10% federal tax          Attains age 59 1⁄2                          Death
penalty)                            Death                                       Becomes Disabled
                                    Becomes Disabled                         AND after satisfaction of five-year rule: Five taxable
                                                                             years of participation in Roth 401(k).
Required Minimum                 Required.                                   Required; however, prior to receiving required
Distributions (RMDs)                                                         minimum distributions, Roth 401(k) contributions
Some plans provide for                                                       may be rolled over to a Roth IRA, which has no
RMDs to begin at the later of                                                RMD requirement. This benefit allows the
age 70 1⁄2 or separation from                                                employee to forego taking distributions and leave
service, provided the partici-                                               the entire balance to his/her heirs.
pant is not a 5% owner
Rollover Options                 Can be rolled over to another traditional   Can be directly rolled over to another Roth 401(k)
                                 401(k) or to a regular IRA.                 or to a Roth IRA. If rolled to another Roth 401(k),
                                                                             five-year rule counts from participant’s first Roth
                                                                             401(k) contribution. If rolled to a Roth IRA, five-
                                                                             year rule starts from date employee opened his/her
                                                                             first Roth IRA.
Employee Contribution            Total limit in 2006 is $15,000 (additional $5,000 catch-up contribution available if age 50 or
Limits                           older) in combined pre-tax 401(k) and after-tax Roth 401(k) contributions.
Employer Match                   Allowed.                                    Allowed, but employer match of Roth 401(k)
                                                                             contribution is treated as a pre-tax contribution.
Vesting Schedule                 All pre-tax deferrals are fully vested.     All after-tax contributions are fully vested.
Recordkeeping                    Before-tax contributions must be            After-tax contributions must be accounted for
                                 accounted for separately within the         separately within the same plan.
                                 same plan.
Sunset Provision                 Not applicable.                             The after-tax Roth 401(k) contribution option is only
                                                                             available until December 31, 2010 (unless
                                                                             Congress extends it).
                   The possibilities of a Roth 401(k): A tax-free
                   retirement benefit, a more generous legacy.
                    Reward your employees with possibilities of a tax-free retirement benefit and the
potential to leave more of their retirement savings to their families, free from federal taxes.

The new Roth 401(k) option, with its after-tax contributions and tax-free qualified distributions, is modeled
in part on the Roth IRA, which has become a popular way to save for retirement. But income limits for the
Roth IRA prohibit people with high incomes from opening a Roth IRA. The new Roth 401(k) option allows
all employees to make use of its tax-free possibilities, regardless of income.

With no required minimum distributions, the Roth IRA can continue to accumulate, and ultimately be
passed to heirs free from federal income taxes. The potential for freedom from federal taxes in retirement,
along with the potential to leave more retirement savings for heirs may have great appeal to some of the
employees you value most.

                   Who is most likely to prefer the
                   rewards of the Roth 401(k) option?

       • Workers with high assets, who are seeking to manage their taxes in retirement can
         benefit from the Roth 401(k)’s tax-free qualified distributions.

       • Employees who have already accumulated substantial retirement savings, and are
         seeking to manage or lower their distribution levels in retirement, can opt to roll the Roth
         401(k) into a Roth IRA, which has no required minimum distributions.

       • People who won’t need extra income in retirement, but are interested in bequeathing
         their retirement savings to their heirs, may also be interested in rolling Roth 401(k)
         money into a Roth IRA.

       • Young workers with lower incomes today, who expect their income levels to rise and to
         pay taxes at higher rates in retirement, can benefit by paying taxes on contributions
         now, and later paying no federal taxes on qualified distributions in retirement.

       • Workers who are more than five years away from retirement may be interested in the Roth
         401(k), since there is a five-year rule on taking qualified distributions. Qualified distributions
         from a Roth 401(k) can only occur five years after the first Roth 401(k) contribution.
                         TRANSAMERICA®. The retirement answer.
                  With over 72 years in the retirement services business, Transamerica Retirement Services1
                  is dedicated to providing a comprehensive retirement solution that exceeds your
                  expectations. Our Plan design expertise, combined with superior customer service makes
Transamerica Retirement Services one of America’s top ten pension providers.2


          • Customized Plan design through your local TPA or Transamerica – giving you the
            Plan you want.

          • SponsorConnect SM, dedicated Sponsor support for day-to-day administrative tasks,
            Monday-Friday, 6AM-5PM Pacific Time

          • Online plan management available 24/7 via our award-winning3 Web site,

          • ERISA4 and Plan compliance assistance for the life of the Plan.5

          • Fiduciary management, with tools to help you fulfill ERISA obligations.

          • Extensive Employee communication and educational materials, including award-winning
            employee communications.3

     For more information call (888) 401-5826 to speak with a Transamerica
          representative, or visit us online at

This brochure is not intended to provide legal or tax advice. You may also want to consult with a financial advisor,
attorney, accountant or tax-professional when deciding which approach is right for you.
    Transamerica Retirement Services (Transamerica or TRS), a marketing unit of Transamerica Financial Life Insurance
    Company and other of its affiliates, specializes in the promotion of retirement plan products and services.
  Transamerica Retirement Services ranks as one of the top-ten retirement services providers based on data published in CFO Magazine’s April and May 2005
  report “CFO Buyer’s Guide: 401(k) Providers.” This ranking is derived from data on the total number of plans managed by investment companies reporting
  over $8 billion in 401(k) assets.
  Transamerica Retirement Services’ communications materials have received awards from various organizations, including the Profit Sharing/401(k) Council of
  America (PSCA) in 2004, the Insurance and Financial Communicators Association in 2004, Dalbar, Inc. in 2005, and Dalton Pen Communications in 2005.
  For more information, please refer to the Web site
  Employee Retirement Income Security Act of 1974 (ERISA).
  Transamerica Retirement Services does not provide legal advice to Clients. On-staff ERISA Attorneys provide advice and support to our internal ERISA team
  and information pertaining to the latest developments in the retirement industry only.

For Producer and Plan Sponsor Use Only.

TRS 4469-1005