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Guest Article

(From the October 24, 2007 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Bill Introduced to Delay Effective Dates for Certain PPA Funding Provisions

A bill’s journey from introduction to enactment is long and arduous, and only a select few make it all the way. So just because legislation (H.R. 3868) has been introduced to delay the effective date of the Pension Protection Act’s (PPA) funding rules for single-employer plans does not mean it is going to happen. Time is one of several factors: those provisions are scheduled to begin taking effect in just over two months, on January 1, 2008, and Congress is looking to adjourn for the year in mid-November. But at least the first step has been taken, courtesy of Representatives Earl Pomeroy (D-ND) and Eric Cantor (R-VA), both members of the House Committee on Ways and Means.

As introduced, H.R. 3868 generally would extend the effective date of the PPA’s minimum funding rules for single-employer plans, benefit restrictions for underfunded plans, and mortality and interest rate assumptions for calculating lump sum distributions until plan years beginning after June 30, 2008. Furthermore, if the IRS and Treasury failed to issue guidance on certain provisions by June 30, 2008, the effective date for those provisions automatically would be extended until such guidance was issued.

So far there has been no indication from House Ways and Means Committee Chairman Charlie Rangel (D-NY) or other House leaders about whether or when to expect action on H.R. 3868. To date no companion bill has been introduced in the Senate.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Taina Edlund 202.879.4956, Mike Haberman 202.879.4963, Stephen LaGarde 202.879-5608, Erinn Madden 202.572.7677, Bart Massey 202.220.2104, Martha Priddy Patterson 202.879.5634, Tom Pevarnik 202.879.5314, Tom Veal 312.946.2595, Deborah Walker 202.879.4955. Copyright 2007, Deloitte.

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