The Pension Protection Act of 2006:Its Effect on Tribal Benefit Plans

Presented by:

John S. SwimmerGodfrey & Kahn, SC, Attorneys at Law

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

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

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.”

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”

The Pension Protection Act In Context

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.

• Federal law relating to issuance of tax exempt bonds

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

Thank you!For more information, please feel free to contact:

• John Swimmer 414-273-3500