President Bush Signs Pension Bill

August 18, 2006

President Bush signed the Pension Protection Act (H.R.4) into law at a ceremony held in Washington, D.C. on August 17, 2006. The legislation, formed to overhaul private pensions, was approved by the Senate Aug. 3 on a vote of 93 to five with no amendments, a few days shy of the House’s acceptance of the legislation on July 28.

For ICMA-RC, one of the most important provisions in the bill is permanency for the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). This provision was approved by the conferees and included in HR 4. Instead of expiring in 2010, the provisions in EGTRRA, such as portability, increased contributions limits, catch-up contributions and greater flexibility in plan designs, are all made permanent.

“This legislation will make it easier for workers to participate in these plans,” the president said. “It will remove barriers that prevent companies from automatically enrolling their employees in these savings plans, ensure that workers have more information about the performance of their accounts, provide greater access to professional advice about investing safely for retirement, and give workers greater control over how their accounts are invested.”

While the President gave credit to all the conferees present, he particularly noted House Majority Leader John Boehner’s (R-OH) leadership on the defined benefit provisions and investment advice. He also pointed to Rob Portman, his current Office of Management & Budget director, as the principal author of some of the important defined contribution provisions of the bill while he was in Congress.