For the most part, companies welcomed the Aug. 17 announcement that President Bush had signed into law the Pension Protection Act of 2006 (PPA). Hailed by many as the most sweeping change to the retirement system in more than 20 years, the PPA first and foremost makes it easier for companies to enroll employees automatically in 401(k) plans and provides a safe harbor from discrimination allegations when doing so.
“The new safe harbor is designed to be a strong incentive for employers to offer automatic enrollment,” says Heidi Winzeler, counsel to Osler, Hoskin & Harcourt in New York. “And depending on the design of a particular plan, the PPA structure may be less expensive than existing automatic enrollment requirements.”
