New Pension Law Rules on Providing Investment Advice to 401(K) Plan Participants
By Lawrence J. Hass, J. Mark Poerio, Joshua H. Sternoff and Lynda M. Noggle
On August 3, 2006, Congress passed the long-awaited Pension Protection Act of 2006 (H.R. 4). Once President Bush signs the PPA into law (as he has indicated he will do), the PPA will amend the prohibited transaction provisions of ERISA and the Internal Revenue Code to create an exemption for investment advice provided to participants in 401(k) and other participant-directed pension plans pursuant to an “Eligible Investment Advice Arrangement”.