Pension Protection Act

The Pension Protection Act of 2006 was recently signed into law by President Bush. The act contains numerous provisions that benefit individuals including:

• Made permanent the increased IRA contribution limits that were set to expire in 2010 and provides for indexing contributions to inflation after 2008.
• Made permanent the tax free withdrawal status for qualified distributions from 529 college savings plans that were scheduled to expire in 2010.
• Allows non-spouse beneficiaries of qualifies plan assets to rollover the proceeds to their own IRA.
• Allows for automatic enrollment in 401k plans, requiring workers to opt out rather than opt in.
• Allows employers to pay advisors to counsel participants in qualified plans without becoming liable for the advise given to participants as long as the company performs due diligence when hiring advisors and the advisor is a fiduciary accepting person liability for the advise provided.
• Allows members of the military called to active duty to take penalty free distributions from IRA, 401k, and similar qualified plans.
• Permanently allow for Roth 401k and 403b plans.
• Made permanent the Savers Credit under which low and moderate income tax payers can receive a non refundable credit for contributions to retirement savings plans and IRAs based on income and filing status.

For more information look here and here.

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