Major pension reform in U.S.

Act creates more rigorous DB funding requirements and safe harbour against anti-garnishing rules
By
|hrreporter.com|Last Updated: 09/29/2006

The United States Senate overwhelmingly passed what some call the most significant overhaul of the country’s pension system in three decades.

The Senate voted 93-5 in favour of the Pension Protection Act, which deals with aspects of total rewards packages including retirement plans and health plans.

The act will require defined benefit (DB) plans to be funded at 100 per cent of liability measures and the plans will have seven years to make up shortfalls. The act also increases the annual deductible contributions an employer can make.