Season 6 Episode 7 (click here)
The PPA didn’t invent automatic enrollment, target-date funds, or professional investment management. But it was arguably a transformative shift in the design of workplace retirement plans – and the focus of those who support them.
Signed into law on August 17, 2006, the Pension Protection Act:
- Tightened pension funding rules (pension “protection,” after all),
- Created automatic enrollment safe harbor, including auto escalation,
- Directed development of qualified default investment alternatives (QDIAs),
- Made key EGTRRA provisions permanent (higher contribution limits, catch-up contributions, Roth 401(k)).
The bigger change was philosophical. The PPA gave us a plan design template architected to leverage participant behavior towards better outcomes. Not so much an “if you build it, they will come” presumption, as a “let us do it for you” acknowledgement.
In this episode, Nevin (Adams) and Fred (Reish) recap some of the impacts – and how the PPA transformed the very essence of retirement planning in the U.S.
Episode Resources
Talking Points: 20 Years Later, Did the PPA Really Change Everything?
The Pension Protection Act: This Changes Everything | PLANSPONSOR
The Impact of PPA on Retirement Savings for 401(k) Participants