How to cash in on the new pension law — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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How to cash in on the new pension law

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in Discrimination and Harassment,Human Resources

At long last, Congress has passed the biggest pension reform law in years!

The massive new Pension Protection Act of 2006 extends more than 20 retirement planning provisions, adds tough restrictions for charitable deductions and impacts literally dozens of vital tax rules.

Here’s a roundup of the key changes in the new law:

Funding defined-benefit plans. The new law requires employers—beginning in 2008—to fund defined-benefit plans to cover 100 percent of the liability instead of the current 90 percent. Plans that aren’t fully funded at the beginning of 2008 may gradually increase funding over a seven-year period.

Strategy: Weigh the extra cost against the benefits. This new rule could force your company to revamp its defined-benefit plan or switch to another type of plan.

Plan deduction limits. The new law also encourages employers to create a funding cushion through higher deduction limits. For plan years beginning in 2006 an...(register to read more)

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