TAX 9873 Lecture Notes - Lecture 37: Pension Protection Act Of 2006, Employee Retirement Income Security Act, Pension
Document Summary
Minimum funding rules- apply to fund benefit plans. A combination of economic, demographic, social & political forces influenced the rise of pensions in the 20th century. Decline in birth rate; increase in life expectancy. Notion of pension as a gratuity, as opposed to a moral obligation. The pension movement resulted in the passage of erisa in 1974, the most comprehensive. Erisa (employee retirement income security act of 1974) Address tax matters, primarily those affecting qualified plans. Erisa used taxation as a motivation for people to deduct and get all kinds of benefits. Ensures workers that if company goes bankrupt and plan not adequately funded, workers have insurance that they will get funded. Ppa tightened requirements of companies to fund defined benefit plans. Stock market went down, liabilities went up 20%, and gov"t imposed new laws to fund the underfunded. Ppa bad law because of type of tightening of funding.
