Newsline

Reform Signed into Law

CHANTILLY, Va. - President Bush signed The Pension Protection Act, P.L. 109 – 280 into law last month. It will affect all single and multiemployer defined benefit plans, including the National Pension Fund and local pension funds. Most of the new law's provisions take effect in 2008.

The new law increases the deduction limit for employer contributions to 140 percent of current liability, up from 100 percent, enabling plans to build financial reserves to offset future downturns in the market. The law eliminates the punitive IRS excise tax for employers in plans with an accumulated funding deficiency.

The new law will also force faster funding of new obligations by requiring benefits to be amortized over 15 years instead of 30 years. Plans with funding problems are required to improve their funding percentage. The law gives multiemployer plans with funding problems 10 to 15 years to improve their funding. For multiemployer plans in the worst shape, the law adds new flexibility for trustees and the bargaining parties in the area of benefit modifications, such as the ability to reduce or eliminate early retirement subsidies for participants who have not yet retired. To prevent plans in the worst shape from deteriorating further, employer surcharges apply until a program to improve funding has been approved.

The bill makes some technical changes in withdrawal liability, enhances retirement tax breaks, adds charitable giving limits, including a change for S-corporation shareholders, and makes permanent the increases in section 415 limits adopted in 2001 and other tax changes.

To view the bulletin, go to www.smacna.org.

Publication date: 09/25/2006

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

2015 ACCA Conference

Images from the 2015 ACCA Conference in Grapevine, Texas. Posted on April 8, 2015.

Podcasts

NEWSMakers: Clint Schreck

Clint Schreck, general manager, Columbus Worthington Air, Columbus, Ohio, discusses winning Angie’s List Super Service Award, how to handle online reviews, and much more.

More Podcasts

ACHRNEWS

NEWS 05-18-15 cover

2015 May 18

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe

Legislation and Regulation

What legislative/regulatory issue is most important to you as a HVAC business owner?
View Results Poll Archive

HVACR INDUSTRY STORE

2015.jpg
2015 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research

 

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

DON'T MISS A THING

Magazine image
 
Register today for complete access to ACHRNews.com. Get full access to the latest features, Extra Edition, and more.

STAY CONNECTED

facebook icontwitter iconyoutube iconLinkedIn i con