The "Pension Protection Act of 2006" (H.R. 4) means a whole lot of work for accounting firms. First of all, it is a massive piece of legislation that goes way beyond pension reform, so firms will first be analyzing what it says. The various publishers are helping with summaries of the numerous provisions, providing detailed analysis, and identifying tax-planning strategies that the new law will generate.
Firms will be sending newsletters and e-mail to clients containing an overview of the changes, as well as specialized communications on provisions with specific application to certain clients. Firms will also, in some cases, be contacting clients and advising them whether they should take advantage of any of the changes. For example, it mighty pay for some clients to convert a pension plan to a cash-balance plan, or for a non-spousal beneficiary of a retirement plan distribution to make a rollover.
Firms will also have to tell clients of new compliance requirements, such as those added for certain charitable giving. Finally, firms will be exploring whether any substantial new business can be generated by the changes made by the Act. The change that allows fiduciary advisors to give investment advice to plan participants or beneficiaries if certain requirements are met is being looked at closely in that regard.
I would think that the larger the firm is, the easier it is to evaluate the implications of a major piece of legislation for the firm and its clients. I feel a bit sorry for the smaller firms, and especially sole practitioners, as the immediate ramification of developing that needed understanding of the Act will significantly increase the demands on their limited time and resources. Let's hope, their clients will see the special value and worth of those efforts.
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