In December 2005, the U.S. House of Representatives approved the Pension Protection Act (PPA); worker pension laws were thereby reformed to become more reflective of current economic needs. On October 4, 2006, as part of the French-American Chamber of Commerce’s First Wednesday Discussion Series, Christian Hancey, Associate, Nixon Peabody LLP, presented an overview of the PPA and assessed its impact on both employees and their employers.

New funding requirements, described as “more volatile” by Mr. Hancey, have been outlined in the PPA for Single Employer Plans and will become effective in 2008. Multiemployer Plans were also described; modest changes were made to these Plans with regards to funding rules. The PPA, for instance, requires underfunded Plans to be labeled as “Endangered” or “Critical” in order to help restore solvency. Mr. Hancey also addressed the benefits of the Eligible Automatic Contribution Arrangement that, for instance, preempts state wage withholding and offers special withdrawal rights.

Philip Berkowitz, Partner, Nixon Peabody LLP, discussed Severance Plans and the Employee Retirement Income Security Act (ERISA). Describing ERISA as a “shield”, this coverage provides specific benefits with regards to severance payments. It offers clarity to both the employer and the employee, prohibits state law claims (including misrepresentation and fraud), prohibits punitive damages, and allows participants to take action in Federal court if a plan administrator breaches fiduciary responsibility.

The French-American Chamber of Commerce would like to thank Nixon Peabody LLP for generously hosting and sponsoring this informative breakfast discussion.