Pension Fund Issues In The Boardroom: Is Your Pension Plan Becoming Too Expensive?

The Pension Protection Act of 2006 (PPA), which was signed into law on August 17, 2006, resulted in arguably the most sweeping changes to pension laws since ERISA was enacted in 1974. A large number of the changes affected single-employer defined benefit pension plans, especially with regard to funding and disclosure rules. Most of these changes are not effective until 2008 and many are phased in over a multi-year period.

The PPA also provided new rules for determining the amount of premiums that a plan must pay to the Pension Benefit Guaranty Corporation (PBGC). The PBGC is the federal government agency that insures a portion of a defined benefit plan’s benefits in the event the plan is terminated without being able to pay all benefits due.