Overview of the New Pension Protection Act of 2006
The long-awaited pension reform bill, the Pension Protection Act of 2006, was signed into law by President Bush on August 17, 2006. In addition to revising the rules regarding benefit plan asset investment and prohibited transaction exemptions, the Act provides comprehensive changes to the laws regarding retirement plans of all types (as well as addressing other tax-related matters). This memorandum focuses on those material provisions of the Act concerning retirement plans that we believe are of greatest relevance to our clients -- the funding, distribution and disclosure rules relating to defined benefit pension plans (including union-sponsored multiemployer pension plans), the legality and terms of cash balance pension plans, the diversification and other requirements of defined contribution plans, and certain fiduciary requirements.