Pension Protection Act 2006

The signing of Pension Protection Act (PPA) has brought in a lot of changes to the retirement plan provisions. Though 900 page act addresses various issues, the one that has caught attention from Corporate and the media alike is the automatic enrollment in a 401(k) Plan.

It is estimated that 1 in every 5 American retire without a retirement money. So the new law will prove to be a boon to those in the nature of procrastination. Also the lack of guidance from the employer on the subject so far lead to relegating the decision. After all it is human nature to decide by not deciding. Beginning next year, the employer can hire a 'fiduciary advisor' to assist the employees on investment.

The plan has also brought about a host of tax-related changes to the retirement funds like who can benefit from the roll-over of IRA and the inflation adjusted phase-out for IRA contribution.

Here is a link which enlists both the tax and non-tax provisions of the new Act. Understanding the New Tax Rule.......