Explore the benefits for you and your staff to add the Paychex payroll-integrated 401k plan and Flexible Spending Account program

1. Pre-Tax Benefitsfor small businesses

3. TAX- SAVINGS

4. CANNOT PREDICT FUTURE, ONLY PREPARE

5. ATTRACT HIGHER QUALITY EMPLOYEES

6. RETAIN CURRENT EMPLOYEES2

7. Retirement – a “three-legged” stool Retirement Personal Savings Company Sponsored Plans Social Security

8. Social Security ?? Read the following excerpt from the Social Security Administration’s website: “Social Security was never meant to be the sole source of income in retirement.” A comfortable retirement is based on a “three-legged” stool of Social Security, company-sponsored retirement plans and personal savings. 4

9. Pre-Tax Growth vs Post-Tax Growth *Assuming 25% tax rate, 10% rate of return, compounded only monthly 5

11. What is compounding interest?

12. The process of reinvesting interest to earn additional interest

13. The more frequent the compounding, the more you earnThe example below shows the difference a head start can make 6

14. Cannot Predict Future, can only Prepare for it In addition to the battle against inflation as you can see in the chart on the right, retirees are living longer and longer. Recent studies have shown that a typical retiree can expect to live 20+ years. Therefore, one must acquire a large nest egg.

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18. Attract Top Employees Studies show that without benefits, outside of acquaintance or luck, a business owner cannot attract the best quality EMPLOYEES Research shows small businesses need retirement benefits* While some research shows that small business retirement plans are too expensive for their potential customers, a new survey underscores the fact that employers might want to reconsider that notion. By Editorial Staff While some research shows that owners think small business retirement plans are too expensive, a new survey underscores the fact that employers might want to reconsider that notion. Fidelity finds that 49% of workers with a retirement plan say the would not take a job with a company that doesn't offer one. 68% percent of employees said that a retirement plan is critical or very important. Just 36% of employers said it was critical or very important to their staff recruitment and retention efforts. *© 2007 Employee Benefit News and SourceMedia, Inc. 11

19. Retain Current Employees If you’re not offering a retirement plan to your employees, don’t be surprised to lose them to a competitor that does! Misconceptions about 401(k)s could cost Small Business Owners By Lynn Gresham Forty percent of workers in small companies say they would leave their job for one that provided a 401(k) plan, according to a survey conducted by Harris Interactive and sponsored by ShareBuilder 401(k), a subsidiary of ING Direct. . . . 12

20. What is the actual cost of one bad hire?* Information provided by Right Management Consultants.Mishires financially impact an organization beyond direct sourcing costs.According to a survey* of 444 organizations throughout North America, the negativeconsequences of bad hires and promotions reach beyond lost customersand market share. Here are some alarming statistics:• Replacement costs an average of 2½ times* an individual's salary, includingrecruitment, training, severance costs, and lost productivity.• More than 4 of 10 organizations (42%) said it costs at least three timesthe mishire's salary. 13

21. How Do You Get Money In? 14

22. How Can You Maximize Your 401(k)? 15

24. Money Manager

25. Optional Match/Vesting16

26. Possible EmployerMatching/Vesting Contributions 17

27. IRS/DOL Money Manager Participants Employer Payroll Bank Record Keeper Non-Paychex 401(k) Paradigm 18

28. The Paychex Advantage: A Seamless Flow of Contributions Investment Provider Paychex Client Power of Paychex Integrated 401(k) 19

30. Preparation of Forms 1099-R and 945

31. Quarterly IRS nondiscrimination testing

32. Quarterly management reports

33. Quarterly participant statements

34. Daily valuation of account balances

35. Account access via participant website and automated phone system

36. Toll-free phone support

37. Loan modeling and administration

38. Roth option

39. Discretionary profit sharing plan

40. Deferral calculations for pre-tax and Roth

41. Electronic recordkeeping and fund transfer each pay period

42. Payroll integration of employee and employer contributions and census data

43. Enrollment meeting and enrollment kits

44. Automatic enrollment20

45. Money Manager Options 21

46. Small BusinessFlexible Spending Accounts

48. Allows employees to take certain out-of-pocket expenses on a pre-tax, rather than a post-tax basis:Medical Dental Vision Over-the-counter items With a Dr’s Prescription Dependent Care 23

50. Federal Income Tax Savings

51. Tax savings on FICA

52. State Tax Savings

53. Employer:

54. Savings on FICA tax

55. Workers’ Comp Savings (CA only)APPROX. 12% SAVINGS ON PAYROLL TAXES APPROX. 25% - 45% SAVINGS ON EXPECTED GOODS AND SERVICES 24

56. FSA has 3 “buckets” Plan Features 3) Out-of-pocket medical, dental, vision, and over-the-counter expenses Insurance premiums 2) Dependent Care expenses 25

58. Regular non-discrimination testing

59. Enrollment meeting and enrollment materials

60. Payroll integration (payroll clients only)

61. Participant website and toll-free support

62. Employer and employee status reports

63. FSA Debit card

64. Weekly claim processing

65. Direct deposit of reimbursements

66. Discretionary employer contributions allowable through employer funded FSA26