Modifications to pension distribution requirements for senior citizens and businesses and technical corrections to the Pension Protection Act of 2006 (PPA) are among the measures included in legislation that recently passed in both the U.S. House of Representatives and Senate. The bill is now awaiting President George Bush’s signature.
The Worker, Retiree, and Employer Recovery Act of 2008 (H.R. 7327) provides for a one-year moratorium on required minimum distributions from individual retirement accounts and defined contribution plans for 2009, according to the Senate’s Committee on Finance. In addition, the committee reports that the legislation includes the following provisions:
- a requirement for plans falling below a set target funding percentage to fund up to the specified amount for a given year—instead of 100 percent
- the ability of multi-employer plans to elect to freeze their current funding certification based on the previous year’s level (for plan years starting between October 1, 2008, and October 1, 2009)
- a 3-year extension—from 10 to 13 years—of the current funding improvement or rehabilitation period for multi-employer plans
“This vital legislation addresses the immediate needs of workers, retirees, and businesses hit hard by the financial and economic crisis facing our country,” said Sen. Edward Kennedy (D-Mass.), chairman of the Senate Health, Education, Labor and Pensions Committee. “With trillions of dollars in retirement savings in serious jeopardy, the relief in this bill will help Americans weather the storm until the economy begins recovering.”
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