Legislation signed into law on August 17 2006, for which the primary goals was to protect and enhance the retirement savings and pension provisions. Changes enacted under PPA 06 include the following:
- Change the IRC 402(f) notice requirement from 30 to 90-day range to 30 to 180-days , effective for plan years beginning January 1, 2007
- Made permanent the retirement provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) – which was signed into law on June 7, 2001- that was schedule to sunset.
- Made the Saver’s credit provision permanent
- Permitted direct conversions from qualified plans to Roth IRAs, effective for distributions that occur after December 31, 2007
- Added a new exception to the 10% excise tax for Qualified Reservist Called to Active Duty effective for distributions that occur after September 11, 2001
- Permitted rollovers from qualified plans by Non-Spouse Beneficiaries, effective for distributions after December 31, 2006
- Permitted direct deposit of tax refund to IRAs, effective for tax years beginning 2007
- Permitted Qualified charitable distributions for 2006 and 2007
PPA 06 was primarily intended to increase the retirement security of defined benefit plan participants, by making it harder for plan sponsors to default on funding obligations.
Additional Helpful Information
- The Pension Protection Act of 2006
- Summary and Bill Information
- Technical Explanation of H.R. 4 prepared by the Joint Committee on Taxation
- Chart on PPA Provisions
- IRS Notice 2007-8 , IRS Requests comments on the phased retirment provision