Pension Reform Moves Forward — Stage Set for Final Agreement in 2006
As the U.S. House of Representatives was wrapping up its 2005 legislative session, the Pension
Protection Act (PPA, H.R.2830) seemed stalled. But a last-minute agreement between key
lawmakers and the United Auto Workers cleared the way, and the House approved the PPA
by a vote of 294-132 on December 15, 2005. IRS Finalizes Roth 401(k) Regulations
The IRS has finalized the Roth 401(k) regulations that were proposed last year. Although the final regulations generally follow the proposed regulations, the IRS made some changes. Pension Fund Finances for 2005: Losing Ground
During the last five years, most defined benefit plan sponsors have watched their plans' funded
status topple from overfunded to significantly underfunded and then slowly recover lost
ground. Benefits Activity During 2005 Session Will Continue Into 2006
Benefits-related legislation remained high on the legislative agenda during 2005 as Congress
focused on pension reform. Legislators proposed clarifications to the legal status of hybrid
pension plans and new laws to encourage automatic 401(k) enrollment, improve retirement
education and increase other retirement savings. Rethinking Deferred Compensation for Tax-Exempt and Governmental Employers
The new section 409A rules — along with more aggressive IRS enforcement — will require
tax-exempt and government sponsors of section 457(f) plans to review their existing deferred
compensation plans and to consider new plan designs carefully. Lessons From Watson Wyatt's 2005 HCI: HR Programs, Turnover Risk and Employee Productivity
Eight years of research into Watson Wyatt's Human Capital Index® (HCI) has consistently
found a strong correlation between effective HR program design and financial performance. Flex HSA Act Aims to Improve Health Savings Accounts
Representative Eric Cantor (R-Virginia) introduced the Flex HSA Act (H.R.4511) on
December 13, 2005. The act aims to promote health savings accounts (HSAs) by raising the
limit on HSA contributions and permitting individuals covered by flexible spending accounts
(FSAs) and health reimbursement arrangements (HRAs) to contribute to HSAs.
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