Pension Protection Act of 2006
The Pension Protection Act of 2006 represents the most significant pension legislation since ERISA. Some of the provisions of the Act that affect the PBGC include:
- The method for calculating the "variable-rate" PBGC premium is changed.
- If the PBGC takes over a terminated plan, the guarantee of employees' pension benefits is frozen as of the date of the plan sponsor's bankruptcy filing, which may be months or years before the plan terminates.
- The PBGC's guarantee of pension benefits that become payable on a plant shutdown is limited if the shutdown occurred within five years of the bankruptcy filing.
- The complicated rules that govern the PBGC's pension guarantee for business owners are simplified.
- If the PBGC takes over a terminated plan, the plan sponsor is required to pay a "termination premium" of $1,250 per participant per year for three years.
Read more about this topic: Pension Benefit Guaranty Corporation
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