Pension Protection Act Blog

Last Friday, May 27th, President Bush signed into law the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110-28). This Act was H.R. 2206, and will be remembered for increasing the minimum wage and providing for funding for the war in Iraq. The Act also contained a few technical corrections to the Pension Protection Act of 2006, which corrections made to 4 different sections of PPA. I’ve posted redlined versions of these sections.

Section 114 of PPA is the section on conforming amendments. Section 6612 of the appropriations act made a slight change to Internal Revenue Code section 420(e)(2)(B) on the definition of Excess Pension Assets.

Section 402 of PPA is the section containing Special Funding Rules for Certain Plans Maintained by Commercial Airlines. Sections 6614 and 6615 of the appropriations act changed two different areas in Section 402.

Section 841 of PPA was impacted by Section 6612 of the appropriations act, which changed a Code section reference in Code section 420(f)(2)(E)(i)(III).

Section 1106 of PPA was changed in a couple of ways by Section 6611 of the appropriations act. Section 1106 is one of my favorite odd sections of PPA because it reads like a Jeopardy question on what multiemployer plan was established in Chicago on August 12, 1881, and is a plan described in Code section 501(c)(5) and is exempt from tax under Code section 501(a). Instead of just naming the plan by the plan sponsor, the Pension Protection Act contained this description instead leaving pension geeks to guess at which plan PPA is referring to. Whoever sponsors this plan managed a technical correction to the description in the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. The words describing this plan are not changed by the technical correction, they are just rearranged.

Section 6613 of the appropriations act changed Code section 402(c)(3)(A), so that is now states:

(A) In general. The requirement of this paragraph are met if each group health plan or arrangement under which applicable health benefits are provided provides that the applicable employer cost for each taxable year during the cost maintenance period shall not be less than the higher of the applicable employer costs for each of the 2 taxable years immediately preceding the taxable year of the qualified transfer transfer or, in the case of a transfer which involves a plan maintained by an employer described in subsection (f)(2)(E)(i)(III), if the plan meets the requirements of subsection (f)(2)(D)(i)(II).

Stay tuned because more technical corrections to the Pension Protection Act are expected.

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