President Bush today put his signature on a bill that is supposed to shore up the Pension Benefit Guaranty Corp. and may create business opportunities for life insurers and life insurance producers.
“Americans who spend a lifetime working hard should be confident that their pensions will be there when they retire,” Bush said at a signing ceremony in the Eisenhower Executive Office Building. “Last year I asked Congress to strengthen protections for the pensions of our workers. Members of both parties came together to pass a good bill that will improve our pension system, while expanding opportunities for Americans to build their own nest-eggs for retirement.”
The primary goal of the new law, which is known as the Pension Protection Act of 2006, was to ensure that employers do a better job of valuing and funding defined benefit pension obligations.
Many pension plans use group annuities as funding vehicles, and that has given life insurers a keen interest in the core pension protection provisions of the PPA, the enacted version of H.R. 4.
Other provisions in the PPA will set marketing standards for corporate-owned life insurance, allow employers to enroll employees in 401(k) plans automatically, and make it easier for investment advisors to advise plan participants.
Both Democrats and Republicans welcomed the signing of H.R. 4.
“This new law means greater peace of mind for more than 100 million Americans by safeguarding their retirement, and it will help millions more in the future,” says Sen. Edward Kennedy, D-Mass. “No longer can executives just look out for themselves while their companies’ pensions go bust. Under this bill, their workers must come first.”
Rep. John Boehner, R-Ohio, the House Majority Leader, says the PPA offers long overdue reform to the pension system.
“This bill takes another critical step forward by boosting 401(k) plans that help Americans build retirement nest eggs that enhance their retirement security,” Boehner says.