On August 3, 2006, the Senate passed HR 4, the Pension Protection act of 2006. President Bush signed the bill on August 17, 2006. The bill is approximately 1,000 pages long and deals with a host of retirement plan and other issues, with a major emphasis on reforming funding and other aspects of defined benefit pension plans. Most of the laws don't go into effect until 2008, but there are some exceptions.

The bill contains significant changes impacting 401(k) and other defined benefit contribution plans. Following is a list of the key changes:

EGTRRA Pension Provisions Made Permanent - includes ROTH 401(k), higher inflation adjusted limits, Age 50 Catch Ups, Expanded Rollovers, and other EGTRRA changes

Savers Credit - income limits adjusted for inflation - refunds can be made to plan/IRA

Safe Harbor Automatic Enrollment Plans - addresses employer concerns regarding automatic enrollment and provides incentives and safe harbors provided certain conditions are met

Fiduciary Relief for Providing Investment Advice to Participants - plan fiduciaries who arrange for the provision of investment advice will not violate the fiduciary requirements if certain conditions are met

Expanded Rollover Options - including option for non-spousal rollovers to IRA

Creation of New DB(k) Plan Design - click here for information on this new plan

404(c) Protection Available During Black-outs

Default Investment Options with 404(c) Protection - DOL to define

5500 Reporting - simplified for small plans and electronic display rules added

Relief for Participants in Plans with Employer Stock

Quarterly Benefit Statements Required in Participant Directed Plans

New Statutory Prohibited Transaction Exemptions Created

A summary of the entire bill and the bill itself can be found here: www.dol.gov/EBSA/pensionreform.html