The recently passed sweeping pension reform bill, signed into law by President Bush last month, included a variety of deadlines for making plan changes, permitting certain plan services, or making certain legal protections available (See  What’s Inside the Pension Protection Act ).

For defined contribution plans, as of 2007:

• A DC plan that holds publicly traded company stock has to permit participants to “diversify” the employer’s contributions after three years of service.
• Advice to participants about their investments will be allowed based on approved advice models where the service is driven by a flat fee (See  Pension Protection Act Opens New Door to Advice ).
• Plan sponsors can have 404(c) protection for their default investments   where notice and default fund requirements are met. The law required the US Department of Labor (DoL) to issue regulations “on the appropriateness of designating default investments that include a mix of asset classes consistent with capital preservation or long-term capital appreciation, or a blend of both.”
• Vesting requirements will have to be in a three-year cliff or six-year graded model where vesting applies to employer contributions.
• New benefit statements will be required for all plans.
• DC plans that require investment in company stock have to give participants a notice of their diversification rights as well as educational material about the importance of diversification.

Plan sponsors should also be actively planning for the PPA’s 2008 issues, including:

• the fundamental changes to the Employee Retirement Income Security Act (ERISA) DB funding requirements,
• evaluating the impact of PPA changes on any cash balance plan,
• studying the viability for their company for the new 401(k) automatic enrollment safe harbor (See  Pension Reform Influences Automatic Enrollment Designs ), and
• reviewing 2008 disclosure requirements, particularly the new DB funding notice.

More information is here.