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The Pension Protection Act (H.R. 2830) will fix outdated pension rules to help ensure employers properly and adequately fund their worker pension plans, provide meaningful new disclosure to workers about the status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?
	A Living Trust is an entity created for the purpose of holding and managing assets A Living Trust is an entity created for the purpose of holding and managing assets for the benefit of the creators of the Trust (the “Trustors”) during their lifetimes and then for the purpose of management and distribution of the assets to the beneficiaries designated by the Trustors. There are various reasons for creating Living Trusts: (a) To avoid probate administration on death of either Trustor. (b) To avoid a court supervised conservatorship in the event of lifetime disability of either Trustor. (c) To provide for the management and distribution of assets during continued administration of the Trust or upon its termination.