FOR IMMEDIATE RELEASE: October 5, 2006

FOR MORE INFORMATION:
Steve Burke
For Visa USA
(703) 683-5004 ext. 108
sburke@crc4pr.com

San Francisco, CA - October 5, 2006 - For millions of Americans, the workplace benefits open enrollment season for 2007 is just weeks away. To ensure that eligible employees are not missing out on potentially hundreds or even thousands of dollars in tax savings, Visa USA is educating consumers on how to take advantage of their company-sponsored reimbursement and retirement savings accounts.

"American workers are each leaving thousands of dollars on the table this year and paying too much in taxes because they are not enrolled in their employer's health care and dependent care Flexible Spending Accounts," said Jason Alderman, director of Visa USA's Practical Money Skills for Life financial education program. "With the combined value of these benefit packages often worth a third or more of an employee's base pay, these are tax savings advantages that no one can afford to ignore."

Open enrollment season is the annual period when workers can make adjustments to their employer-provided benefits, such as health and dependent care Flexible Spending Accounts (FSAs) as well as 401(k) retirement plans. FSAs work by allowing employees to set aside money from their paychecks on a pretax basis to pay for eligible out-of-pocket medical expenses not covered by regular medical, dental and vision coverage and day care expenses. The money is deducted from their pay before federal and state income taxes and Social Security have been withheld, meaning their taxable income is lowered, which in turn reduces the amount of taxes they must pay. A typical worker who spends a total of $5,000 a year on day care and out-of-pocket medical expenses can cut their tax bill $1,250 by using an FSA. Employers that offer a dependent care FSA typically offer a separate health care FSA to pay for out of pocket medical expenses as well.

While FSAs are widely available to workers, many do not fully understand the tax benefit of participating in these types of programs.

Some employers also sponsor a retirement savings plan for their employees such as a 401(k) or 403(b) plan. These plans allow employees to save money towards retirement on a tax-deferred basis. This means money is deducted from their paycheck before taxes are withdrawn, which in turn lowers their taxable income and the amount of taxes owed. They don't pay taxes on these savings or their investment earnings until they withdraw them – usually at retirement when taxable income, and tax rate, may be much lower.

Through it's free, award-winning money management program, Practical Money Skills for Life (www.practicalmoneyskills.com/benefits), Visa walks consumers through the ABC's of Flexible Spending Accounts (FSAs) and 401 (k) plans.

Listed below are just some of the key components of FSAs and 401(k) plans:

Flexible Spending Accounts (FSAs) Benefits:

• A Health Care FSA can be used to pay for qualified medical expenses that are not covered by an employer's medical, dental or vision plans, or by any other type of insurance.
• These expenses may include deductibles and co-payments for office visits and prescription drugs; braces or dental work over plan limits; contact lenses, glasses or lasik surgery; over-the-counter medicines (aspirin, cough syrup, etc.), acupuncture and chiropractic care; smoking cessation programs; and many more.
• As people incur medical expenses not fully covered by insurance, they should submit a copy of the Explanation of Benefits or the provider's receipt to the plan administrator, which will then issue them a reimbursement check or make a direct deposit to their bank account. Some employers offer a debit card with the FSA, which gives employees a more convenient way to directly access their funds.
• A Dependent Care FSA lets an employee use pre-tax dollars to pay for eligible expenses related to care for a child, disabled spouse, elderly parent, or other dependent incapable of self-care, so they (and their spouse) can work.
• The minimum and maximum amounts that one can contribute to the Dependent Care FSA are set by the employer, although the maximum allowed by the IRS is $5,000 a year. Under IRS rules governing Dependent Care FSAs, the annual maximum someone may contribute is $5,000, or $2,500 if they are married and filing a separate tax return. Married couples have a combined $5,000 limit, even if each has access to a separate FSA through his or her employer.

401(k) Plan Benefits:

• A 401(k) plan is a relatively painless way to save, since the money goes directly to an employee's retirement account, reducing the temptation to spend it.
• Employees can usually contribute a percentage of their pay up to the IRS-allowed maximum ($15,000 in 2006), although people over age 50 can make additional "catch-up" contributions of up to $5,000.
• Some companies will match a portion of a worker's contributions as an incentive to save: A common match is 50 percent of the first 3 percent of pay they save.
• Many 401(k) plans offer tax-deferred earnings as well as loan and investment options, including stock, bond and money market mutual funds.
• Employees are always 100 percent vested in (that is, have complete ownership of) their own contributions to their 401(k) account.

Employees can learn more about their company's health care and dependent care FSAs or 401(k) plans by asking their employer's benefits department for a copy of the Summary Plan Description and enrollment materials. In addition, the Internal Revenue Service (IRS), www.irs.gov, provides helpful information such as a list of eligible medical and dental expenses for Health Care FSAs as well as tax rules governing both FSAs and 401(k) Plans.

Practical Money Skills for Life is a free, educational resource for teachers, students and consumers. In addition to classroom and home lesson plans, it contains detailed information on financial planning for retirement, including interactive online calculators that help estimate retirement and savings needs.

About Visa
Visa USA is the nation's leading payment brand and largest payment system, enabling banks to provide their consumers and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance and security of Visa payments for all stakeholders in the payment system — members, cardholders and merchants. Through its 13,369 member financial institutions, more than 500 million Visa-branded cards have been issued to cardholders in the United States.

Worldwide, cardholders in more than 150 countries carry more than 1 billion Visa-branded cards, accounting for more than $3 trillion in annual transaction volume. VisaNet, Visa's global processing system and the world's largest financial network, processes transactions with unparalleled reliability.

Visa offers a trusted, reliable and convenient way to access and mobilize financial resources — anytime, anywhere, anyway.

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