The House of Representatives last week passed a pension reform bill that could significantly impact the money management industry.
The Pension Protection Act of 2005, which was passed in the House by a vote of 294 -132, is specifically designed to shore up the U.S. Pension Benefit Guarantee Corp., the insurer of corporate pension plans. But the act, which must be reconciled with a Senate bill passed last month, also enhances the defined contribution program by making permanent the higher annual contribution limits for IRAs and qualified pension plans, including the catch-up provisions for individuals aged 50 and higher. Known as the EGTTRA provisions, they were scheduled to sunset in 2010.
The Pension Protection Act also included a provision that encourages automatic enrollment in defined contribution programs, like 401(k) plans, and a measure that would make it easier for workers to get investment advice.
"This comprehensive reform bill is vital to shoring up our nation's defined benefit pension system," said Paul Schott Stevens, president of the Investment Company Institute in