With most PPA 2006 requirements taking effect in 2008, companies with both defined benefit and defined contribution plans are turning to Milliman for guidance through the often-confusing maze of compliance issues. We are an industry leader in pension valuations and have worked proactively with clients since PPA was passed, offering them insight and practical steps to prepare them for PPA 2006 implementation.
Hundreds of pages of regulations describe PPA 2006 requirements and how to implement them, and additional rulings continue to be issued. Milliman consultants are industry leaders in forward-looking PPA 2006 implementation strategies for both defined benefit and defined contribution retirement plans.
Defined benefit plans
Single-employer plans: Under PPA 2006, decisions made about how minimum contributions are calculated this year affect next year as well, complicating the task of choosing the optimal path. PPA 2006 creates an urgent need for accurate forecasting to determine the appropriate minimum funding requirements. Milliman uses cutting-edge actuarial computer modeling and applies an in-depth understanding of the law to help clients discover their best pension funding options among traditional choices and new alternatives.
Our modeling allows clients to examine multiple possible scenarios to understand the future implications of their funding choices. We present clients with a full range of strategies and frankly discuss each option's pros and cons, so the client can select the best course of action.
Multiemployer plans: PPA 2006 changed the funding rules for poorly funded multiemployer plans, requiring projections to determine the plans’s status—identified as green, yellow, or red. Milliman’s sophisticated projection tools allow trustees, employers, and labor unions to understand and prepare for PPA's effects on their plans. Milliman has worked successfully with both labor and management to develop appropriate actions and schedules required under PPA 2006.
Defined contribution plans
In keeping with PPA 2006, Milliman offers clients new opportunities to streamline and simplify 401(k) and 403(b) plans and promote retirement savings among employees. Our automatic enrollment plans are designed to boost employee savings and encourage participation.
Milliman's SmartTomorrow™ package offers the auto-enrollment and auto-increase features that start participants saving for retirement. Under SmartTomorrow, plans can meet the Qualified Default Investment Alternatives (QDIA) requirements that help plan sponsors fulfill their fiduciary responsibilities. Our consultants also assist clients in complying with PPA's many new required participant notifications, ensuring that benefit program goals are met.
