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President Signs Pension Overhaul
- August 18th, 2006
President Bush signed a major revision of pension law on August 17, 2006, that is aimed at shoring up private pension plans. The new law requires employers to fully fund their pension plans over the next seven years. Currently, private pension plans are estimated to be underfunded by more than $450 billion. The law also encourages 401(k) plans by allowing employers to automatically enroll employees in these plans.
In addition, the law includes the following provisions:
- The higher 401(k) contribution limits passed in 2001 are now permanent. You can contribute $4,000 a year or $5,000 a year if you are over age 50.
- Companies must give their employees more information about their pensions.
- Anyone who inherits a workplace retirement account may roll the account into an IRA without paying taxes. Previously, only spouses could roll over an account.
- Airlines have 10 years to fully fund their pension plans, 17 years if the airline is in bankruptcy proceedings.
Critics of the law worry that the provisions encouraging 401(k)s will mean employers will stop offering traditional pension plans that provide a reliable retirement income stream for employees.
For more information on retirement planning, click here.
Local Elder Law Attorneys in Ashburn, VA
The Estate Planning & Elder Law Firm PC
Bill founded The Estate Planning & Elder Law Firm, P.C. in 1994. Bill limits his practice to the areas of estate planning and administration, incapacity planning, Medicaid, asset protection planning, and elder law. He is one of (15) fifteen attorneys practicing in Virginia, Maryland and the District of Columbia, ce...
Law Offices of John L. Laster
John Laster is a lawyer licensed to practice in Virginia, Maryland and the District of Columbia. He limits his practice to wealth transfer planning, trusts, wills, powers of attorney, health care decision-making issues, estate administration and related tax, elder law and disability concerns. Listed in The Best Lawyers...
Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
For Jeffrey Hammond, the practice of Elder Law is personal. Jeff’s many years of experience in law and in business did not prepare him for the crisis he faced in 2005 and 2006 when his father suffered a stroke and both of his parents suffered from dementia and other medical problems. At that time, Jeff began an i...