President Bush Signs Pension Protection Act of 2006
August 17, 2006
On Aug. 17, 2006, President George Bush signed the Pension Protection Act of 2006 (PPA). The President’s remarks on signing the bill are available here, and a related fact sheet is here.
The PPA of 2006 will:
o Require companies with defined benefit plans to fund them 100 percent (previously 90 percent);
o Require companies to make up their shortfalls within seven (7) years;
o Prevent companies with plans that are less than 80 percent funded from promising additional benefits unless they could immediately pay for them; and
o Clarify the legality of what are known as hybrid or cash balance plans.
FEI’s Committee on Benefit Finance supported the bill, and joined together with a diverse group of other organizations as a member of the Pension Coalition which backed the bill.
Additional information pertaining to the bill is provided in the links below. Check back to this webpage periodically for new items.
Summaries of Pension Protection Act of 2006 prepared by:
Deloitte Tax LLP
Prepared Aug. 18, 2006 by Serena Dávila (sdávila@FinancialExecutives.org), Director, Technical Activities, Financial Executives International (FEI). This summary does not represent FEI opinion, unless specifically noted above