Changes to Pension Fund Investment Rules Approved by Senate, Expected to Become Law

On August 3, 2006, the Senate passed, by a vote of 93 to 5, the Pension Protection Act of 2006, which is the most comprehensive reform of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) since its original passage more than thirty years ago. The proposed law is expected to be presented to President Bush for signature in the near future and to become law in the same form approved by the Senate today and by the House of Representatives as H.R. 4 last Friday. The new law includes provisions that will significantly change the regulatory framework for investment by retirement plans subject to ERISA and/or Section 4975 of the Internal Revenue Code of 1986, as amended. Our client alert memo dated August 2, 2006 describes only the investment provisions of the new law; in addition, the memo sets forth suggested steps to consider in response to these important changes.