The Pension Protection Act of 2006 (PPA) was signed into law by President Bush on August 17th, 2006.
The Act contains a variety of provisions designed to strengthen the funding rules for defined benefit pension plans. The new rules will generally apply to plan years beginning after 2007.
The Act includes a number of significant tax incentives to enhance retirement savings for millions of Americans, including:
1. Permanent Retirement and Savings Incentives
2. Saver’s Credit Made Permanent
3. DROP Plans for Public Safety Employees
4. Direct Deposit of Tax Refunds into IRAs
5. Automatic Enrollment in employer-sponsored defined contribution pension plans
6. Treatment of IRA Contributions for Guard and Reservists Called to Active Duty
7. Long Term Care/Annuity Products
8. Public Safety Officer Early Withdrawals for Health and Long Term Care Insurance
9. Corporate-Owned Life Insurance (COLI)
10. Clarification of Treatment of Tribal Pension Plans
11. Black Lung Benefit Trust Funds
12. Transfers of Excess Defined Benefit Fund Assets for Retiree Health
Charitable Giving Incentives
The bill contains a charitable giving incentives package designed to encourage charitable donations:
1. Tax-Free Distributions From IRAs for Charitable Purposes
2. Charitable Deduction for Contributions of Food Inventory
3. Basis Adjustment to Stock of S Corporation Contributing Property
4. Charitable Deduction for Contributions of Book Inventory
5. The Tax Treatment of Certain Payments to Controlling Exempt Organizations
6. Qualified Conservation Contributions
7. Excise Tax Exemption for Blood Collector OrganizationsCharitable Reform
In addition, the bill contains a charitable reform package designed to responsibly regulate exempt organizations.
For additional information, see
. The Committee on Ways & Means, US House of Representatives website: (http://waysandmeans.house.gov/ResourceKits.asp?section=2476
· BenefitsEssentials Newsblog
· H.R. 4, Pension Protection Act of 2006 (July 28, 2006)
· Joint Committee on Taxation Technical Explanation Of H.R. 4, The "Pension Protection Act Of 2006,"
As Passed By The House On July 28, 2006, And As Considered By The Senate On August 3, 2006 (JCX-38-06).