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Compliance July 6, 2001
Bush Inks Pension Reform
June 7, 2001 (PLANSPONSOR.com) - President Bush
provided taxpayers with $1.35 trillion in relief - and plan
sponsors with some long-awaited pension relief - today by
signing the Economic Growth &Tax Relief Reconciliation
Act of 2001 into law.
Reported by editors@plansponsor.com
For plan sponsors the bill promises to offer expanded deductibility of employer contributions, simplified rules for top-heavy testing, relief from the same desk rule, and enhanced contribution limits for employees.
A significant enhancement designed to promote “catch-up” savings for older workers is included, as is accelerated vesting requirements and greater portability of benefits between qualified plans and individual retirement accounts (IRAs).
In addition to pension reform, the bill also includes other benefits for employers, including a tax credit of 25% of actual child care expenses provided to workers, as well as a percentage of the cost of child care resource and referral services they offer.
The bill also includes a permanent extension of the exclusion for employer-provided educational assistance, and expands it to encompass graduate education as well as undergraduate work.
Although the legislation is set to expire on December 31, 2010, due to a sunset provision added to the bill to comply with congressional budget rules, Republicans are vowing to push to make the tax cuts permanent.
– Camilla Klein editors@plansponsor.com
For a more complete listing of the pension provisions, check out http://www.plansponsor.com/content/news/rules/pensionreformspecs .