Pension Protection Act Of 2006 - PPA

DEFINITION of 'Pension Protection Act Of 2006 - PPA'

An act of legislation that makes a large number of reforms to U.S. pension plan laws and regulations. This law made several pension provisions from the Economic Growth and Tax Relief Reconciliation Act of 2001 permanent, including the increased IRA contribution limits and the increased salary deferral contribution limits to a 401(k). It also attempts to strengthen the overall pension system and reduce the reliance on the federal pension system and the Pension Benefit Guaranty Corporation.

BREAKING DOWN 'Pension Protection Act Of 2006 - PPA'

Along with making past provisions permanent, the act also attempts to strengthen the pension system. This is done through the requirement that companies with under-funded pensions pay additional premiums along with the elimination of loopholes that allowed under-funded pensions to miss pension payments. The act also requires that pension plans provide more accurate assessments of their pension obligations.

RELATED TERMS
  1. Pensionable Service

    The period of service, expressed in a yearly figure, for which ...
  2. Pension Option

    A set of options that a pensioner has in regard to the handling ...
  3. Accumulated Benefit Obligation

    An approximate measure of a company's pension plan liability. ...
  4. Fully Funded

    A pension plan that has sufficient assets needed to provide for ...
  5. Pension Shortfall

    A situation in which a company offering employees a defined benefit ...
  6. Statement Of Changes In Net Assets ...

    An income statement that identifies any transactions that alter ...
Related Articles
  1. Retirement

    Pension Plans: Pain Or Pleasure?

    Employees have a love/hate relationship with this retirement option.
  2. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  3. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  4. Retirement

    Top 7 Signs Your Pension Fund Is In Trouble

    How to tell if your company’s pension is being depleted - will there be anything left for you?
  5. Retirement

    How Safe Is Your Pension?

    A 2014 law permits some private pension plans to reduce benefits. How to figure out if your retirement income is endangered.
  6. Retirement

    How Pensions, Social Security Differ

    Both pensions and Social Security provide an income stream to retirees, but they differ widely on how they're structured and funded. Here's the lowdown.
  7. Financial Advisors

    Pension Advances: What You Should Be Wary Of

    The terms some pension advance firms require can be costly. Here's how to be sure your clients aren't making bad decisions.
  8. Retirement

    The Pension Bill: A Wolf In Sheep's Clothing

    Find out why the 2006 act may not be all it's cracked up to be.
  9. Financial Advisors

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  10. Term

    What are Pension Funds?

    A pension fund is a company-sponsored fund that provides income for employees in retirement.
RELATED FAQS
  1. The company I am receiving my pension plan from has just filed bankruptcy. Could ...

  2. What can you do with your pension if you leave the employer and can you borrow money ...

    I am planning to leave my job that I have worked at for 8 plus years and I just received a notice about a pension that I ... Read Answer >>
  3. Are Canadian Pension Plans inflation-protected?

    Learn about the Canada Pension Plan and how it adjusts its contributions and benefits each year for changes in inflation ... Read Answer >>
  4. How does a pension income drawdown work?

    Understand what a pension income drawdown plan is, and learn the current rules governing pension income drawdown plans in ... Read Answer >>
  5. Are my Social Security Benefits reduced if I receive extra pensions from different ...

    Understand the effect collecting a pension can have on your Social Security benefits, depending on whether you were employed ... Read Answer >>
  6. What's the difference between a 401(k) and a pension plan?

    Discern the differences between 401(k) plans, in which employees assume the market risk, and pension plans, in which the ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center