Action Item Summary
On August 17, 2006, President Bush signed the Pension Protection Act of 2006 (PPA), a comprehensive pension reform bill. A primary focus of PPA is to improve the financial security of defined benefit pension (DB) plans, but PPA also includes many provisions designed to protect savers and boost retirement savings in IRAs and defined contribution (DC) plans, such as 401(k) plans. Some of PPA’s provisions took effect immediately; others become effective in 2007, and some take effect in 2008.
Document sponsors and employers need to be aware of the provisions that are already in effect and those that become effective in 2007 so they can change plan operations and issue participant notices, some of which are due to participants by December 2, 2006—30 days before the January 1, 2007, effective date. IRA providers must also be aware of which provisions are already in effect and those that become effective in later years.
BISYS Retirement Services has developed the following summary that lists the PPA provisions and effective dates applicable to DC plans and IRAs. Please refer to the highlighted areas within the summary for provisions that are in effect now or that require your immediate action.