President Bush today signed the Pension Protection Act of 2006, enacting the most sweeping rewrite of the nation's retirement law since the Employee Retirement Income Security Act was adopted in 1974. Among the changes, the new law speeds up the time over which companies must amortize deficits to their defined benefit plans, requires at-risk plans to make additional contributions, provides special funding relief to airlines, encourages automatic enrollment in 401(k) plans and protects new cash balance plans from age-discrimination suits.
In a statement, Herb Allison, chairman and chief executive of TIAA-CREF, New York, said the pension bill was a victory for Americans trying to meet long-term savings goals. "The legislation increases the amount of money Americans can save for retirement tax-free, promotes automatic enrollment in retirement savings plans and makes permanent the tax benefits of 529 college savings plans," Mr. Allison said in the statement. "By encouraging Americans to save for retirement and their children's education, this new law helps to serve the greater good."
"This is a huge victory for pension plan investors, who will gain additional access to alternative investment tools that have the potential to preserve and increase the assets in their retirement plans," Lisa S. McGreevy, executive vice president and COO for the hedge fund industry's Managed Funds Association, Washington, said in a statement.
For a web link to the entire bill, go to www.pionline.com/pensionact.