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2006 Pension Protection Act

Welcome to the Pension Protection Act of 2006 Website

Within its scope, the Pension Protection Act of 2006 (PPA) is as far-reaching as any pension legislation enacted in the last 25 years. This Web site provides a resource for materials related to the PPA, including statutory language, IRS guidance, Eversheds Sutherland Legal Alerts and other relevant information.

Congress passed the PPA after a lengthy and, at times, fractious legislative process, and the legislation was signed by the President on August 17, 2006. The bill, approved by the Senate on August 3, 2006, without amendment, is identical to the bill (H.R. 4) passed by the House on July 28, incorporating the provisions agreed to by the conference on the separate bills passed earlier by the two chambers.

Focusing mainly on plan funding, the PPA is the culmination of a policy debate over pension reform that began over five years ago. It both reacts to recent developments affecting American businesses - including the economic volatility and corporate distress and failures experienced and continuing in this decade - and pushes forward the trend towards greater individual responsibility for retirement security.

The PPA contains, among others, the following provisions:

  • Funding and related requirements for single-employer plans, including new funding requirements, PBGC premiums, and deduction limits;
  • New employer stock/diversification requirements and accelerated minimum vesting requirements that take effect for plan years beginning after 2006;
  • Many salutary benefit provisions enacted on a temporary basis in the Economic Growth and Tax Relief Reconciliation Act of 2001 made permanent;
  • ERISA, the Code and the Age Discrimination in Employment Act amended to provide that a cash balance plan or other type of hybrid plan will not violate ERISA, fail to qualify for tax-exempt status under the Code, or discriminate on the basis of age if certain requirements are met; and
  • Automatic enrollment procedures enhanced in important ways.

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Adam C. Pollet, Associate
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