Illinois Asset Protection News

The Pension Protection Act 2005

The Pension Protection Act (H.R. 2830) will fix outdated pension rules to help ensure employers properly and adequately fund their worker pension plans, provide meaningful new disclosure to workers about the status of their pension plan, protect taxpayers from a possible multi-billion dollar taxpayer bailout, and make common sense modifications to encourage greater personal savings for retirement and other needs.

Ensuring Employers Fund Their Pension Promises to Workers:

• Provides a permanent interest rate based on a modified “yield curve” for employers to more accurately measure current pension liabilities as they come due.
• Requires employers to make sufficient contributions to plans in order to meet a 100 percent funding target, phased in over five years for companies for plans that are, in general, funded above 90 percent under current law; companies with plans funded below 90 percent must meet the new 100 percent target immediately.  The phase-in of the 100 percent target begins in 2007.
• Requires employers to make additional contributions to erase funding shortfalls over seven years.
• Triggers accelerated contributions if a plan’s funded status falls below 60 percent, with a five-year phase-in. 
• Reduces the smoothing of interest rates to protect plans against market and funding volatility.
• Prohibits employers from using credit balances if their plans are funded at less than 80 percent.
• Permits employers to make additional maximum deductible contributions of up to 150 percent of current liability. 

Contact a Illinois Asset Protection lawyer today and get a free consultation!

	Did You Know?
	Asset protection can help when disaster strikes Asset Protection: More coverage generally means you will have less to pay out of your own pocket if disaster strikes. You must determine the amount you can financially afford to lose. Depending upon your determination, more insurance may be the answer. You need enough liability coverage to protect yourself from lawsuits resulting from your possible negligence.