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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.
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Local Elder Law Attorneys in Ashburn, VA
Needham Mitnick & Pollack, PLC
Judith Mtinick is well known for acting as a guardian, conservator, trustee or agent on behalf of clients or by court appointment. This experience gives her a wide perspective and extensive practical knowledge that she uses when advising clients in drafting their planning documents. Her experience, as a court appointed...
Hale Ball Carlson Baumgartner Murphy PLC
Loretta Morris Williams is a certified elder law attorney by the National Elder Law Foundation. Ms. Williams was admitted to the Council of Advanced Practitioners, National Academy of Elder Law Attorneys (NAELA) in 2012. She serves as President of the Virginia Academy of Elder Law Attorneys. Ms. Willia...