Big Changes in Pension Plans, but Long Term Care Untouched

There are big changes coming to retirement plans. In August 2006, President Bush signed into law the Pension Protection Act of 2006 (PPA). This law affects both employee funded plans such as 401(k)s and traditional defined benefit pension plans.

Congress was partially motivated by the looming crisis of the Pension Benefit Guaranty Corporation. So several of the provisions in the act serve to shore up private defined benefit pension plans that provide a pension. Sadly, it’s likely the stricter rules will encourage the recent trend of companies terminating or freezing their defined benefit plans.

Most of the changes regarding defined benefit pension plans are fairly arcane, but one thing is clear: These plans do nothing to address long term care needs. For long term care, Uncle Sam makes it clear that they want you to buy your own long term care insurance, and it’s in your interest to get it early, long before you may need it.

I’m not saying here you have to get your free comparison quote from the Buyer’s Advocate. That’s your decision.

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