Pension Protection Act Rules for Defined Contribution Plans

On Thursday, August 17, 2006, President Bush signed into law the Pension Protection Act of 2006 (PPA). The PPA addresses numerous funding issues for single and multiemployer plans, new disclosure rules, and interest rate assumptions, which we have covered in previous LawFlashes. This LawFlash addresses a few additional discrete areas including investment advice, defined contribution plan changes, pension portability, and diversification.

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) substantially increased pension and individual retirement account (IRA) contribution limits through 2010, and made other improvements in pensions and retirement savings through enhanced vesting, portability, and reduced regulatory burdens.

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