Pension Reform Enhances Program
The Pension Protection Act of 2006 was signed into federal law in August. While aimed mostly at private sector defined benefit plans, it did contain several provisions that affect the Program. Most importantly, the new law makes permanent the temporary pension law changes that went into effect in 2002. These include:
Increased annual contribution limits
Higher contribution limits for participants over age 50
Rollovers among qualified plans, 403(b) plans, IRAs, and our 457(b) Program
Ability to defer the maximum in both our Program and a 403(b) plan
Ability to use Program funds to purchase service credits in your defined benefit plan
Tax credit for lower-income participants who contribute
In addition to making these important provisions permanent, the new law has
other potential benefits for Program participants. However, it will be several
months before federal guidance is provided on implementing these changes. Watch
future newsletters and our web site for
further updates.