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Understanding the Pension Protection Act: Impact on Tribal Benefit Plans

Learn how the Pension Protection Act of 2006 affects Tribal Benefit Plans and limits Tribal Sovereignty. This seminar provides valuable information for Tribal leaders and staff to navigate the new law and make informed decisions.

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Understanding the Pension Protection Act: Impact on Tribal Benefit Plans

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  1. Presented by:John S. SwimmerGodfrey & Kahn, SC, Attorneys at Law The Pension Protection Act of 2006:Its Effect on Tribal Benefit Plans

  2. Welcome! On August 17, 2006, the Pension Protection Act of 2006 was signed into law. It adversely affects Tribal Sovereignty by restricting Tribes’ ability to designate their employee benefit plans as “governmental plans”, subjecting the Tribes to increased Federal regulation. As a result, Tribes must make decisions and take action well before the beginning of the next plan year. Godfrey & Kahn, SC, Attorneys at Law, presents the following information to Tribal leaders and their staffs to assist them in understanding the new law and how it affects their Tribes. Presenters: • John Swimmer Godfrey & Kahn

  3. Seminar Overview • The Pension Protection Act In Context: Current Trends In Federal Indian Law • Basics of the Pension Protection Act • How the Reforms Affect Tribal Plans • Retirement Plans • Health & Welfare Plans • Reminder of IRS Requirements for Minors’ Trusts • Tribes’ Options to Respond

  4. The Pension Protection Act In Context: Current Trends In Federal Indian Law • Federal benefits law Issue: tribes were not included in the definition of “governmental plans” under ERISA or the Internal Revenue Code, which covers any: “plan established and maintained for its employees by the government of the United States, by the government of any state or political subdivision thereof, or by any agency or instrumentality of any of the foregoing.”

  5. The Pension Protection Act In Context Tribal position: tribes are governments and, like federal and state government entities, should be able to offer governmental plans Tribes’ solution: Senate Bill 1783 (sections 1311-1313) would amend ERISA and the IRC to expressly include tribal plans in the definition of “governmental plans”

  6. The Pension Protection Act In Context • Federal law relating to issuance of tax exempt bonds Issue: the Tribal Governmental Tax Status Act of 1982 limits the use of tax exempt bonds by tribes to “an essential governmental function that is customarily performed by state and local governments.” IRS has used this language to disallow tribes’ use of tax exempt bonds for hotels, golf courses and other economic development projects. State and local governments are free to use tax exempt bonds for these projects.

  7. Basics of the Pension Protection Act • Many tribes take the position that their plans are “governmental plans” • Governmental plans are exempt from many Internal Revenue Code and ERISA requirements

  8. Thank you! For more information, please feel free to contact: • John Swimmer 414-273-3500

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