Publications

The Senate and the House have now both passed the Pension Protection Act of 2006. As described in this memorandum, the Act makes some helpful changes to the ERISA “plan asset” rules for private equity funds (including hedge funds), and adds new prohibited transaction exemptions all of which may provide substantial relief to private equity funds that are operated as ERISA plan asset funds. It may also substantially reduce the pressure on other private equity funds that are forced to comply with the burdensome requirements necessary to qualify as a “venture capital operating company” or a “real estate operating company”. The Act also addresses a number of other issues under ERISA relating to various types of pension plans (including funding, distribution and disclosure requirements), the legality of cash balance plans, and certain welfare benefits which, together with the plan asset and prohibited transaction matters discussed herein comprise the bulk of the law.